Tobira Therapeutics, Inc. - FORM S-1/A - October 20, 2014

Attached files

As filed with the Securities and Exchange Commission on October 20, 2014.

Registration No. 333-196975

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 4

to

Form S-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

TOBIRA
THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

2834

20-5531916

(State or Other Jurisdiction of

Incorporation or Organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

Tobira Therapeutics, Inc.

701 Gateway Blvd, Suite 300,

South San Francisco, CA 94080

(650) 741-6625

(Address, including zip code and telephone number, including area code, of registrants principal executive offices)

Laurent Fischer, M.D.

Chief Executive Officer

Tobira Therapeutics, Inc.

701 Gateway Blvd, Suite 300,

South San Francisco, CA 94080

(650) 741-6625

(Name, address, including zip code and telephone number, including area code, of agent for service)

Copies
to:

Jay K. Hachigian, Esq.

Bennett L. Yee, Esq.

Richard C. Blake, Esq.

Gunderson Dettmer Stough

Villeneuve Franklin & Hachigian, LLP

1200 Seaport
Boulevard

Redwood City, CA 94063

(650) 321-2400

Christopher Peetz

Chief Financial Officer

Tobira Therapeutics, Inc.

701 Gateway Blvd, Suite 300,

South San Francisco, CA 94080

(650) 741-6625

Ivan K. Blumenthal, Esq.

Jeffrey P. Schultz, Esq.

Daniel A. Bagliebter, Esq.

Mintz, Levin, Cohn, Ferris, Glovsky and

Popeo P.C.

666 Third Avenue

New York, NY 10017

(212) 935-3000

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. ¨

If this Form is
filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for
the same offering. ¨

If this Form is a post-effective amendment
filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

x

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to
delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where
the offer or sale is not permitted.

Subject To Completion, Dated October 20, 2014

Shares

Common Stock

$ per share

This is the initial public offering of common stock of Tobira Therapeutics,
Inc. We are offering shares of our common stock in this offering. Prior to this offering, there has been no public market for our common stock.

We currently expect the initial public offering price per share to be between $ and
$ .

Our common stock has been approved for listing on The NASDAQ Global Market under the symbol TBRA.

We are an emerging growth company as that term is used in the Jumpstart Our Business Startups Act of 2012 and under applicable Securities and
Exchange Commission rules and have elected to take advantage of certain reduced public company reporting requirements for this prospectus and future filings.

Investing in our common stock involves risks. Please see Risk Factors beginning on
page 11 of this prospectus.

Neither the
Securities and Exchange Commission nor any state securities regulators have not approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Per Share

Total

Public offering price

$

$

Underwriting discounts and commissions(1)

$

$

Proceeds, before expenses, to us

$

$

(1)

We refer you to Underwriting beginning on page 133 of this prospectus for additional information regarding total underwriting compensation.

We have granted the underwriters the option to
purchase up to an additional shares of common stock.

All of our existing principal investors and their affiliated entities have
indicated an interest in purchasing an aggregate of approximately $ million of shares of our common stock in this offering at the
initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, less or no shares to any of these investors and their affiliates and any of
these investors and their affiliates could determine to purchase more, less or no shares in this offering. The underwriters will receive the same underwriting discounts and commissions on any shares purchased by these persons as they will on any
other shares sold to the public in this offering.

The
underwriters expect to deliver the shares of common stock to purchasers on or about , 2014 through the book-entry facilities of
The Depository Trust Company.

You should rely only on the information contained in this
prospectus and any free writing prospectus we have prepared in connection with this offering. Neither we nor the underwriters have authorized anyone to provide you with information or make any representations different from or in addition to those
contained in this prospectus or any free writing prospectus we have prepared in connection with this offering. We and the underwriters take no responsibility for and can provide no assurance as to the reliability of any information that others may
give you. We are offering to sell shares of common stock and seeking offers to buy shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of
this prospectus, regardless of the time of delivery of this prospectus or any sale of the common stock. Our business, financial condition, results of operations and prospectus may have changed since that date.

Through and
including , 2014 (25 days after commencement of this offering), all dealers that effect transactions in these securities, whether
or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

For investors outside the United States:
Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to
inform yourselves about and observe any restrictions relating to this offering and the distribution of this prospectus outside of the United States.

This summary highlights information contained in greater
detail elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus carefully before making an investment in our
common stock. You should carefully consider, among other things, our financial statements and the related notes and the sections entitled Risk Factors and Managements Discussion and Analysis of Financial Condition and Results
of Operations included elsewhere in this prospectus.

Overview

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of innovative therapeutics to treat
liver disease, human immunodeficiency virus, or HIV, fibrosis and inflammation. Our lead product candidate, cenicriviroc, or CVC, is a proprietary immunomodulator that can potentially be used to treat a number of disease states with high unmet
medical need. We are developing CVC for nonalcoholic steatohepatitis, or NASH, for which we are enrolling a Phase 2b clinical trial. CVC is a once-daily pill with well-established safety and tolerability in approximately 580 subjects dosed in
completed Phase 1 and Phase 2 trials, including a pharmacokinetics and safety study in subjects with liver cirrhosis and 115 HIV type 1, or HIV-1, infected subjects on treatment for up to 48 weeks. We also plan to advance CVC in a fixed-dose
combination for HIV-1 infection through Phase 3 development and commercialization in collaboration with a strategic partner or with non-dilutive financing.

CVC is a first-in-class oral, long-acting, once-daily, potent dual inhibitor, or antagonist, of chemokine receptor type 2, or CCR2, and
type 5, or CCR5, with anti-inflammatory and anti-fibrotic activity. We are initially developing CVC for NASH, a liver disease characterized by fatty deposits, cellular damage, inflammation and fibrosis. CVC binds to both CCR2 and CCR5 and blocks the
migration of immune cells to the liver in response to cellular damage, thereby disrupting the immuno-inflammatory cascade and the activation of fibrosis generating hepatic stellate cells, or HSCs. We believe CVC is an excellent candidate for the
chronic treatment of NASH due to its safety profile in healthy subjects and HIV patients and first-in-class dual mechanism of action targeting fibrosis-generating cells. We have also demonstrated supportive efficacy signals of CVC in a retrospective
analysis from a completed Phase 2b study of CVC in HIV-1 infected subjects which showed a favorable impact on fibrosis risk scores and soluble CD14, a marker of inflammation and monocyte activation. In addition, we have completed multiple animal
models in which CVC demonstrated a statistically significant reduction in fibrosis with CVC treatment. We also recently completed an open label Phase 1 clinical trial in adult subjects (n=31) with either normal hepatic function or a Child-Pugh liver
disease score of A or B. A Child-Pugh score is a well-established medical scoring system used to assess the prognosis of cirrhotic liver disease. The study demonstrated that CVC was safe in the liver function-impaired patient population and did not
require dose adjustments. We believe there are no other product candidates in development or approved for NASH that target the immuno-inflammatory pathways responsible for fibrosis.

NASH is a serious inflammatory type of non-alcoholic fatty liver disease, or NAFLD. NAFLD is the most common
liver disease and is associated with obesity and type-2 diabetes and is characterized by the accumulation of fat in the liver. The rising prevalence of obesity-related disorders has contributed to a rapid rise in the prevalence of NASH and NAFLD. In
the United States, NAFLD affects approximately 27%-34% of the population, or an estimated 86 million to 108 million people. Approximately 10%-20% of people with NAFLD will progress to NASH. Current estimates place NASH prevalence at
approximately 9 million to 15 million people in the United States, or 3%-5% of the population, with similar prevalence in other major markets. Prevalence is also rising in developing regions, likely due to the adoption of a more sedentary
lifestyle and westernized diet consisting of processed food with high fat and fructose content.

In addition to the accumulation of fat in the liver, NASH is characterized by inflammation and cellular damage with or without fibrosis.
NASH is a severe condition that can lead to fibrosis and eventually progress to

cirrhosis, portal hypertension, esophageal varices, ascites, liver cancer and liver failure. Progression to cirrhosis and other late stage complications can occur within 5 to 10 years after
initial NASH diagnosis. NASH patients with type-2 diabetes and/or obesity are at a significantly higher risk of disease progression. Once the disease advances beyond NASH to these life-threatening conditions, liver transplantation is the only
alternative. The Centers for Disease Control and Prevention, or CDC, projects the prevalence of obesity to increase from 34% of the U.S. population to 42% by 2030. Driven by the epidemic of obesity, NASH is projected to become the leading cause of
liver transplants by 2020. Given the extremely limited availability of organ donors and high transplant costs, NASH patients who require transplantation will place a significant economic burden on the healthcare system.

There is a significant unmet need for well-tolerated oral
treatments for NASH. As there are no approved pharmaceutical agents for NASH, its market size is difficult to estimate. However, we believe there is a significant market opportunity in NASH and that other well-established markets targeting liver
disease, such as hepatitis C, or HCV, provide a good basis for comparison. HCV affects 3.2 million people in the United States and is forecasted by Datamonitor to have $19.2 billion of drug sales in 2016. We believe that NASH, with no cure or
effective treatment available, is a significantly larger market opportunity than HCV as the prevalence of NASH is estimated to be three to five times that of HCV in the United States.

Our Development Plans

In September of 2014, we initiated our Phase 2b proof of concept study, entitled Cenicriviroc Efficacy and Safety Study in Adult
Subjects with Nonalcoholic Steatohepatitis and Liver Fibrosis, which we refer to as CENTAUR. This trial is a randomized, double-blind study of CVC versus placebo in patients with NASH and liver fibrosis, including those with type-2 diabetes
and/or one or more components of metabolic syndrome. The study is being conducted in North America, Europe and Australia and is led by Dr. Scott Friedman as Study Chairman. We plan to enroll approximately 250 patients in this two-arm clinical
trial randomized 1:1 for once-daily treatment with CVC or placebo for a first period of one year. Following the primary endpoint at one year, patients on CVC will continue on CVC and patients on placebo will either start receiving CVC or continue on
placebo for a second year (1:1). The primary analysis will be conducted at one year and endpoints will include a two point improvement in the NAFLD Activity Score, or NAS, without worsening of fibrosis as assessed by liver biopsy, resolution of
NASH, collagen morphometry, validated fibrosis scores, noninvasive imaging and biomarkers. Endpoints will be measured again at two years. We expect to reach our primary analysis in the second quarter of 2016. In September 2013, the American
Association for the Study of Liver Disease, or AASLD, and the FDA conducted a joint workshop focused on trial designs and endpoints in drug and diagnostic development for liver disease secondary to NAFLD, including NASH. We believe the CENTAUR study
design incorporates surrogate endpoints that may form the basis for demonstrating efficacy required for approval based on feedback from experts involved in this workshop and feedback from the FDA in a June 2014 meeting. We expect additional FDA
guidance to be available by the time we plan our Phase 3 program for NASH.

We are also developing CVC as part of a fixed-dose combination backbone with lamivudine, also known as 3TC, for the treatment of infection by HIV-1, the virus that causes acquired immunodeficiency
syndrome, or AIDS. A fixed-dose combination product contains at least two pharmaceutical agents in a single tablet, in this case CVC and lamivudine, and may then be tested or used in combination with additional therapies to provide a complete
anti-retroviral regimen. The term backbone is commonly used in the context of HIV treatment to describe fixed-dose combination products which may be used with other HIV drugs and allow for a variety of three-drug combinations.

CVC inhibits CCR5, the primary co-receptor
required for HIV-1 to infect immune cells. Despite the availability of potent and well-tolerated classes of anti-HIV therapeutics combined in single tablet regimens, patients on chronic therapy face toxicities
due to lifelong treatment and are particularly at risk for metabolic,

cardiovascular and renal disease complications. U.S. sales of HIV therapies are forecasted to be $9.6 billion in 2014 and growing to $12.8 billion in 2020, according to Datamonitor.
Based on efficacy and safety results from a completed randomized Phase 2b study and our end of Phase 2 meeting with the FDA, we believe that CVC, as part of a novel fixed-dose CVC/3TC backbone in combination with other agents used to treat
HIV-1, has the potential to provide good efficacy and tolerability and to address toxicities associated with currently used established backbones such as kidney and bone toxicity, hypersensitivy reaction and risk of myocardial infarction.
Furthermore, despite recently approved potent and well-tolerated classes of third agent drugs including integrase inhibitors, patients with HIV face chronic toxicity and are developing and dying from age-related diseases a decade younger
than their uninfected counterparts. We plan to advance this Phase 3 program in collaboration with a strategic partner or with non-dilutive financing.

Below is our clinical and preclinical pipeline:

Our Management Team

Our management team has extensive experience
in developing and commercializing therapeutics for liver disease and treatment of HIV infection. Our Chief Executive Officer, Dr. Laurent Fischer, has been involved with Tobira since 2009, providing strategic direction to our programs in
fibrosis and HIV. Dr. Fischer was Chief Executive Officer of Ocera Therapeutics, Inc. and Jennerex, Inc., both developers of therapeutics for advanced liver disease. Dr. Fischer also has experience developing and launching products for HIV
infection at Dupont-Merck Pharmaceutical Company, Dupont Pharmaceuticals Company and F. Hoffmann-La Roche, Ltd. Our Chief Medical Officer, Dr. Éric Lefebvre, has held senior management roles in clinical development and medical
affairs in HIV and HCV drug development at Tibotec Pharmaceuticals, Inc., Janssen Pharmaceuticals, Inc. and GlaxoSmithKline, Inc. Canada. Our Chief Financial Officer, Christopher Peetz, has held financial and corporate development leadership roles
with mergers and acquisition experience at Jennerex, Inc. and Onyx Pharmaceuticals, Inc. Our Chief Operating Officer, Helen Jenkins, has held senior operational leadership roles at Nuon Therapeutics, Inc., Saegis Pharmaceuticals, Inc. and Genentech,
Inc. Our Vice President of Regulatory Affairs, Martine Kraus, has held various leadership roles at Gilead Sciences, Inc. and has led the regulatory approval of several anti-viral products and combinations, including Truvada.

Our Strategy

Our goal is to become a leading biopharmaceutical company developing and commercializing innovative
immunomodulatory therapies for liver disease, HIV, fibrosis and inflammation. To achieve our goal, we plan to:



Complete clinical development and seek regulatory approval of CVC in NASH. We plan to complete enrollment of our Phase 2b clinical trial
of CVC in NASH in the second quarter of 2015 and reach the primary endpoint in the second quarter of 2016. NASH is a disease driven by the growing epidemic

of obesity, with a significant unmet need for approved therapies that are effective and well tolerated. We believe CVC is an excellent candidate for the chronic treatment of NASH due to its
safety profile and first-in-class dual mechanism of action targeting fibrosis-generating cells.



Establish commercial capabilities to market CVC as a leading treatment for NASH. If approved, we intend to establish a specialty sales
force and develop targeted commercial capabilities in key geographies to promote CVC to liver specialists and other physicians treating this disease. Patients with NASH are primarily managed by a concentrated group of liver specialists in the United
States. We believe this will enable us to launch CVC in NASH in a cost-effective, targeted manner.



Advance the clinical development program for CVC in HIV-1 in collaboration with a strategic partner or with non-dilutive financing. We
have obtained initial evidence of efficacy and safety in a Phase 2b clinical trial of CVC in HIV-1 infected patients. We intend to seek collaborators or non-dilutive financing to initiate and complete
Phase 3 clinical testing of a fixed-dose combination backbone of CVC/3TC in HIV-1 infected patients and seek approval of this novel CVC-containing regimen for use in combination HIV therapy with third
agents.



Opportunistically grow our pipeline through additional indications for CVC and in-licensing opportunities. We believe that CVC has the
potential to be an effective immunomodulatory treatment for other CCR2 and CCR5 mediated inflammatory and fibrotic driven diseases such as kidney fibrosis, graft-versus-host disease, or GVHD, and certain cancers. For example, results from a study of
kidney fibrosis in mice were presented at the International AIDS Conference in July 2014. We will continue to seek ways to broaden our pipeline and leverage our capabilities and expertise.

Emerging Growth Company Status

We are an emerging growth company, as defined in
the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies, including, but not limited to: presenting only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced Managements Discussion and Analysis
of Financial Conditions and Results of Operations disclosure in this prospectus; not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; having
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy or information statements; being exempt from the requirements to hold a non-binding advisory vote on executive compensation or seek stockholder
approval of any golden parachute payments not previously approved; and not being required to adopt certain accounting standards until those standards would otherwise apply to private companies.

Although we are still evaluating our options under the JOBS
Act, we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an emerging growth company and thus the level of information we provide may be different
than that of other public companies. If we do take advantage of any of these exemptions, some investors may find our securities less attractive, which could result in a less active trading market for our common stock, and our stock price may be more
volatile. As an emerging growth company under the JOBS Act, we are permitted to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private
companies. However, we are electing not to take advantage of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for
non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to not take advantage of the extended transition period for complying with new or revised accounting standards is irrevocable.

We could remain an emerging growth company until the earliest to occur of:



the last day of the fiscal year following the fifth anniversary of this offering;



the last day of the first fiscal year in which our annual gross revenues exceed $1 billion;



the last day of the fiscal year in which we are deemed to be a large accelerated filer as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700 million as of the
last business day of the second fiscal quarter of such fiscal year; or



the date on which we have issued more than $1 billion in non-convertible debt securities during the preceding three-year period.

Summary Risk Factors

An investment in our securities involves a
high degree of risk. You should consider carefully the risks discussed below and described more fully along with other risks under Risk Factors in this prospectus before investing in our securities. Some of these risks are:



We have a limited operating history, have incurred significant operating losses since inception, including a deficit accumulated during the development
stage of approximately $100.4 million as of June 30, 2014 and we expect to incur significant losses for the foreseeable future. We have generated no revenue from product sales and have never received regulatory approval to commercialize any of
our product candidates. We may never become profitable or, if achieved, be able to sustain profitability.



Our business depends on the success of CVC, which is still under development. If we are unable to obtain regulatory approval for or successfully
commercialize CVC, our business will be materially harmed.



The results of preclinical studies and early clinical trials are not always predictive of future results. Any product candidate we or any of our future
development partners advance into clinical trials, including CVC, may not have favorable results in later clinical trials, if any, or receive regulatory approval.



If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely
affected.



If we fail to obtain the capital necessary to fund our operations, we will be unable to successfully develop and commercialize CVC and other future
product candidates.

Our independent registered public accounting firm has included an explanatory paragraph indicating that our recurring net losses, working capital
deficit and net capital deficiency raise substantial doubt on our ability to continue as a going concern in its report on our audited financial statements.

For further discussion of these and other risks you should
consider before making an investment in our common stock, see Risk Factors immediately following this prospectus summary.

Corporate Information

We were incorporated in Delaware in September 2006. Our principal executive offices are located at 701 Gateway Blvd., Suite 300, South San
Francisco, CA 94080 and our telephone number is (650) 741-6625. Our website address is www.tobiratherapeutics.com. We do not incorporate the information on, or accessible through, our website into this prospectus, and you should not consider
any information on, or accessible through, our website as part of this prospectus.

Unless the context indicates otherwise, as used in this prospectus, the terms
Tobira, Company, we, us and our refer to Tobira Therapeutics, Inc. The Tobira design logo and the marks Tobira and Tobira Therapeutics are the property of Tobira.
This prospectus contains additional trade names, trademarks and service marks of ours and of other companies. We do not intend our use or display of other companies trade names, trademarks or service marks to imply a relationship with, or
endorsement or sponsorship of us by, these other companies.

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to
additional shares of common stock.

Common stock to be outstanding after this offering

shares (or
shares, if the underwriters exercise their option to purchase additional shares in full).

Use of proceeds

We intend to use the net proceeds from this offering to fund the further development of CVC for the treatment of NASH, including a Phase 2b clinical trial currently enrolling patients, and
other immuno-inflammatory and fibrosis indications, as well as for manufacturing of clinical drug supply, working capital and general corporate purposes. We estimate that the proceeds from this offering, together with our current resources, can fund
operations through the primary endpoint of the CENTAUR study. Although we cannot specify with certainty the particular amounts or uses for the net proceeds from this offering, we currently intend to use approximately:



$ million for the
development of CVC for the treatment of NASH including our Phase 2b clinical trial of CVC for the treatment of NASH,



$ million for other
immuno-inflammatory and fibrosis indications,



$ million for manufacturing of
clinical drug supply, and



the remainder for working capital and general corporate purposes.

Accordingly, our management will have broad discretion in using the net proceeds from this offering. See Use of Proceeds. We do not intend to use the net
proceeds from this offering for our Phase 3 program for HIV-1 because we intend to advance this program only through a strategic collaboration or non-dilutive financing.

Risk factors

See Risk Factors beginning on page 11 and the other information included in this prospectus for a discussion of factors you should consider carefully before deciding to invest in our
common stock.

NASDAQ Global Market symbol

TBRA

The number of shares of our common stock that will be outstanding after this offering is based on 7,011,018 shares of capital stock (on an as converted to common stock basis after giving effect to the
transactions described below) outstanding as of June 30, 2014, and excludes:



965,988 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2014, with a weighted-average exercise price of $6.17
per share,

1,500,000 shares of common stock reserved for future grants under our 2014 Equity Incentive Plan, which became effective in May 2014 (subject to
automatic annual adjustment in accordance with the terms of the plan), of which options to purchase 162,685 shares of common stock at an exercise price equal to the initial public offering price set forth on the cover of this prospectus will be
granted coincident with this offering, of which 94,158 shares will be awarded to executive officers; and



44,482 shares of common stock issuable upon the exercise of warrants issued to our term loan lenders at an exercise price of $14.50 per share.

Because the share amounts
set forth above are based on shares of preferred stock and convertible notes outstanding as of June 30, 2014, such amounts do not take into account shares of common stock to be issued in satisfaction of accrued and unpaid interest on the convertible
notes accrued after June 30, 2014 and through the closing date of this offering. Such interest accrues at a rate of approximately $0.2 million per month in the aggregate.

Unless otherwise indicated, all information in this
prospectus assumes the following, which we refer to in this prospectus collectively as the Transactions:



that our restated certificate of incorporation, which we will file in connection with the completion of this offering, is in effect;



the conversion of all outstanding shares of our convertible preferred stock into an aggregate of 3,876,661 shares of common stock immediately prior to
the completion of this offering, which conversion has been approved by the requisite stockholders;



the conversion of all principal and accrued and unpaid interest on convertible notes outstanding as of June 30, 2014 into an aggregate of
2,266,019 shares of stock immediately prior to the completion of this offering, which conversion has been approved by the requisite noteholders; and



no exercise by the underwriters of their option to purchase additional shares of common stock from us.

All of our existing principal investors and their
affiliated entities have indicated an interest in purchasing an aggregate of approximately $ million of shares of our common
stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell more, less or no shares to any of these investors
and their affiliates and any of these investors and their affiliates could determine to purchase more, less or no shares in this offering. The underwriters will receive the same underwriting discounts and commissions on any shares purchased by these
persons as they will on any other shares sold to the public in this offering.

We are a development stage company. The following tables set forth summary financial data. We derived the
summary statements of operations data for the years ended December 31, 2012 and 2013 from our audited financial statements included elsewhere in this prospectus. The summary statement of operations data for the six months ended June 30, 2013
and 2014 and the period from September 11, 2006 (inception) to June 30, 2014 and the summary balance sheet data as of June 30, 2014 were derived from our unaudited financial statements appearing elsewhere in this prospectus. The unaudited financial
statements have been prepared on a basis consistent with our audited financial statements included in this prospectus and include, in our opinion, all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation
of the financial information in those statements. You should read this summary financial data in conjunction with the sections titled Selected Financial Data and Managements Discussion and Analysis of Financial Condition and
Results of Operations and our financial statements and related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of our results for any future period and results of interim periods are not
necessarily indicative of the results for the entire year.

See Note 2 to our financial statements appearing elsewhere in this prospectus for an explanation of the calculation of basic and diluted net loss per common share
and the number of shares used in the computation of the per share amounts.

Pro Forma amounts reflect (i) the automatic conversion of all outstanding shares of our Series A and Series B convertible preferred stock into 3,876,661
shares of common stock; (ii) the conversion of the convertible notes and accrued and unpaid interest into 2,266,019 shares of common stock; (iii) the exercise of 586,181 convertible preferred stock warrants at an exercise price of $14.50
per share; and (iv) the conversion of our outstanding convertible preferred stock warrants issued in connection with our term loans with Square 1 Bank and Oxford Finance LLC, or Oxford, into warrants to purchase 44,482 shares of common
stock.

(2)

Pro Forma Adjusted amounts reflect the pro forma adjustments reflected in (1) above, as well as the sale of
shares of our common stock in this offering at an assumed initial public offering price of $ per share (the mid-point of the
price range set forth on the cover page of this prospectus), and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(3)

Holders of convertible notes elected to convert principal and unpaid interest of the convertible notes into shares of Series B preferred stock contingent upon the
completion of an initial public offering no later than December 31, 2014.

Investing in our common stock involves a high degree of
risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including our financial statements and related notes included elsewhere in this prospectus, before making
an investment decision. If any of the following risks is realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline
and you could lose part or all of your investment.

Risks
Related to our Business

We have
limited operating history, have incurred significant operating losses since inception and we expect to incur significant losses for the foreseeable future. We may never become profitable or, if achieved, be able to sustain profitability.

We have incurred significant
operating losses since we were founded in 2006 and expect to incur significant losses for the foreseeable future as we continue our clinical trial and development programs for cenicriviroc, or CVC, and other future product candidates. As of June 30,
2014, we had a deficit accumulated during the development stage of approximately $100.4 million. Losses have resulted principally from costs incurred in our clinical trials, research and development programs and from our general and
administrative expenses. We have funded our operations primarily through the private placement of our equity securities and debt financing. During 2013 and the first six months of 2014, we received net proceeds of $12.0 million and $8.0 million,
respectively, from the issuance of convertible notes and warrants. In June 2014, we borrowed $15.0 million under our four-year term loan with Oxford. As of June 30, 2014, we had cash and cash equivalents of $18.8 million. In the future, we intend to
continue to conduct research and development, clinical testing, regulatory compliance activities and, if CVC or other future product candidates is approved, sales and marketing activities that, together with anticipated general and administrative
expenses, will likely result in our incurring further significant losses for the foreseeable future.

We currently generate no revenue from product sales, and we may never be able to commercialize CVC or other future product candidates. We
do not currently have the required approvals to market CVC or any other future product candidates, and we may never receive them. We may not be profitable even if we or any of our future development partners succeed in commercializing any of our
product candidates. Because of the numerous risks and uncertainties associated with developing and commercializing our product candidates, we are unable to predict the extent of any future losses or when we will become profitable, if at all.

Our business depends on the success of CVC,
which is still under development. If we are unable to obtain regulatory approval for or successfully commercialize CVC, our business will be materially harmed.

CVC, a dual inhibitor of chemokine receptor type 2, or
CCR2, and type 5, or CCR5, with anti-fibrotic effects in liver disease models and antiviral effects on HIV-1 has been the sole focus of our product development. Successful continued development and ultimate regulatory approval of CVC for
nonalcoholic steatohepatitis, or NASH, is critical to the future success of our business. We have invested, and will continue to invest, a significant portion of our time and financial resources in the development of CVC. We will need to raise
sufficient funds for, and successfully enroll and complete, our ongoing clinical development program for CVC in NASH. The future regulatory and commercial success of this product candidate is subject to a number of risks, including the following:

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we may not have sufficient financial and other resources to complete the necessary clinical trials for CVC;

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we may not be able to obtain adequate evidence of efficacy and safety for CVC in NASH, HIV or any other indication;

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we do not know the degree to which CVC will be accepted as a therapy, even if approved;

in our clinical programs, we may experience variability in patients, adjustments to clinical trial procedures and the need for additional clinical
trial sites, which could delay our clinical trial progress;

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the results of our clinical trials may not meet the level of statistical or clinical significance required by the U.S. Food and Drug Administration, or
FDA, or comparable foreign regulatory bodies for marketing approval;

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patients in our clinical trials may die or suffer other adverse effects for reasons that may or may not be related to CVC, which could delay or prevent
further clinical development;

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the standards implemented by clinical or regulatory agencies may change at any time;

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the FDA or foreign clinical or regulatory agencies may require efficacy endpoints for a Phase 3 clinical trial for the treatment of NASH that differ
from the endpoints of our planned current or future trials, which may require us to conduct additional clinical trials;

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the mechanism of action of CVC is complex and we do not know the degree to which it will translate into a medical benefit in NASH;

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in the event an FDA-cleared tropism assay, a test to identify patients with HIV virus preferentially using CCR5, is unavailable at the time of CVC
approval for HIV, we may be unable to develop, or contract with a third party to develop and obtain clearance for a companion diagnostic tropism assay to identify patients with CCR5-tropic virus which we expect will be necessary for the approval of
CVC for HIV-1 infection as CVC is intended for use only in patients with CCR5-tropic virus;

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if approved for NASH, CVC will likely compete with the off-label use of currently marketed products and other therapies in development; and

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we may not be able to obtain, maintain or enforce our patents and other intellectual property rights.

Of the large number of drugs in development in the
pharmaceutical industry, only a small percentage result in the submission of a new drug application, or NDA, to the FDA and even fewer are approved for commercialization. Furthermore, even if we do receive regulatory approval to market CVC, any such
approval may be subject to limitations on the indicated uses or patient populations for which we may market the product. Accordingly, even if we are able to obtain the requisite financing to continue to fund our development programs, we cannot
assure you that CVC will be successfully developed or commercialized. If we or any of our future development partners are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize CVC, we may not be able to
generate sufficient revenue to continue our business.

We do not intend to progress our HIV program unless we raise significant non-dilutive financing and/or identify a strategic partner who will fund the development and commercialization of CVC in HIV,
which we might not achieve. We may not be able to secure such a strategic partner or non-dilutive financing.

We anticipate that future cash requirements to advance our HIV program will be significant and we plan to advance our HIV program in
collaboration with a strategic partner or with non-dilutive financing. If we are not able to collaborate with a strategic partner or raise non-dilutive financing, we may be unable to initiate a Phase 3 program for CVC in HIV and may never be able to
commercialize the use of CVC in HIV patients. Our ability to generate product revenues, which may not occur for several years, if ever, will depend in part on the successful development and commercialization of CVC in HIV. If we are unable to
commercialize CVC in HIV or if we experience significant delays in advancing our HIV program, our business may be adversely affected.

The results of preclinical studies and early clinical trials are not always predictive of future results. Any product candidate we
or any of our future development partners advance into clinical trials, including CVC, may not have favorable results in later clinical trials, if any, or receive regulatory approval.

Drug development has inherent risk. We or any of our future development partners will be required to
demonstrate through adequate and well-controlled clinical trials that our product candidates are safe and effective,

with a favorable benefit-risk profile, for use in their target indications before we can seek regulatory approvals for their commercial sale. Clinical studies are expensive, difficult to design
and implement, can take many years to complete and are uncertain as to outcome. Delay or failure can occur at any stage of development, including after commencement of any of our clinical trials. In addition, success in early clinical trials does
not mean that later clinical trials will be successful, because later-stage clinical trials may be conducted in broader patient populations and involve different study designs. For instance, our Phase 3 clinical trials of CVC in HIV infection may
differ substantially from the design of our Phase 2b clinical trial and our Phase 2b results may not be predictive of any future Phase 3 results. In addition, our planned initial Phase 3 program will evaluate CVC as a fixed-dose combination with 3TC
rather than as a single agent as was done in the Phase 2b clinical trial. Furthermore, our future trials will need to demonstrate sufficient safety and efficacy in larger patient populations for approval by regulatory authorities. Companies
frequently suffer significant setbacks in advanced clinical trials, even after earlier clinical trials have shown promising results. In addition, only a small percentage of drugs under development result in the submission of an NDA to the FDA and
even fewer are approved for commercialization.

We cannot be certain that any of our ongoing or future clinical trials will be successful, and any safety concerns observed in any one of
our clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications.

Because CVC has not yet received regulatory approval, it is difficult to predict the time and cost of development and our ability to
successfully complete clinical development and obtain the necessary regulatory approvals for commercialization.

CVC has not yet received regulatory approval for the treatment of NASH, and unexpected problems may arise that can cause us to delay,
suspend or terminate our development efforts. Further, CVC has not yet demonstrated efficacy in humans for NASH, and the long-term safety consequences of dual inhibition of CCR2 and CCR5 receptors is not known. Regulatory approval of new product
candidates such as CVC can be more expensive and take longer than approval for candidates for the treatment of more well understood diseases with previously approved products.

Any termination or suspension of, or delays in the
commencement or completion of, our ongoing and planned clinical trials could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.

In order to continue development of CVC, we will need to
submit the results of clinical and preclinical testing to the FDA and other regulatory bodies, along with other information including information about product candidate chemistry, manufacturing and controls, interim clinical results and potential
clinical trial protocols. We may rely in part on preclinical, clinical and quality data generated by contract research organizations, or CROs, and other third parties for regulatory submissions for our product candidates. If these third parties do
not provide us with data in a timely manner, we will not be able to make timely regulatory submissions for our product candidates, which may delay our plans for our clinical trials. Furthermore, if those third parties do not make this data available
to us, we will likely have to develop all necessary preclinical and clinical data on our own, which will lead to significant delays and increase development costs of the product candidate. Delays in the commencement or completion of our ongoing or
future clinical trials for CVC or other future product candidates could significantly affect our product development costs. We do not know whether our current or planned trials will begin on time or be completed on schedule, if at all. The
commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to:

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regulatory agencies failing to grant permission to proceed or placing the clinical trial on hold;

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subjects failing to enroll or remain in our trial at the rate we expect;

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subjects choosing an alternative treatment for the indication for which we are developing the product candidates, or participating in competing
clinical trials;

a facility manufacturing our product candidate or any of its components being ordered by the FDA or other government or regulatory authorities to
temporarily or permanently suspend operations due to violations of current good manufacturing practices, or GMP, regulations, or other applicable requirements;

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any changes to our manufacturing process that may be necessary or desired;

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third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our
anticipated schedule or consistent with the clinical trial protocol, GMP regulations or other regulatory requirements, or our CROs or other third parties not performing data collection or analysis in a timely or accurate manner;

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inspections of clinical trial sites by the FDA or the finding of regulatory violations by the FDA or an institutional review board, or IRB, that
require us to undertake corrective action, that results in suspension or termination of one or more sites or the imposition of a clinical hold on the entire trial or that prohibits us from using some or all of the data in support of our marketing
applications;

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third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations
of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications; or

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one or more IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects or
withdrawing its approval of the trial.

Product development costs will increase if we have delays in testing or approval of CVC or if we need to perform more or larger clinical trials than planned. Additionally, changes in regulatory
requirements and policies may occur, and we may need to amend clinical trial protocols to reflect these changes. Amendments may require us to resubmit our clinical trial protocols to IRBs for reexamination, which may impact the cost, timing or
successful completion of a clinical trial. If we experience delays in completion of our clinical trials, or if we, the FDA or other regulatory authorities, IRBs, other reviewing entities or any of our clinical trial sites suspend or terminate any of
our clinical trials, the commercial prospects for a product candidate may be harmed and our ability to generate product revenues will be delayed. In addition, many of the factors that cause, or lead to, termination or suspension of, or a delay in
the commencement or completion of, clinical trials may also ultimately lead to the denial of regulatory approval of a product candidate. For instance, our initial clinical trial includes a staged approach to enrollment, increased monitoring of liver
parameters and mandated stopping rules for suspected liver injury to address FDA concerns regarding the potential for hepatotoxicity of CVC in the setting of NASH. Further, if one or more clinical trials are delayed, our competitors may be able to
bring products to market before we do, and the commercial viability of CVC or other future product candidates could be significantly reduced.

We have not yet determined the details of any potential Phase 3 trial designs, including identification of a primary endpoint that the FDA
would deem acceptable in a study for the treatment of NASH. If the FDA determines that Phase 3 studies would require substantially different endpoints than those addressed in our ongoing or future clinical trials, we may need to conduct additional
Phase 2 clinical trials of CVC.

If we
encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

Patient enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and nature of
the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, patient willingness to undergo a liver biopsy in our NASH trials, competing clinical trials and
clinicians and patients perceptions as to the potential advantages and disadvantages of the product candidate being studied in relation to other available therapies, including any new

drugs that may be approved for the indications we are investigating. Potential patients for CVC may not be adequately diagnosed or identified with the diseases which we are targeting or may not
meet the entry criteria for our studies.

We
will be required to identify and enroll a sufficient number of patients with NASH for each of our ongoing and planned clinical trials of CVC in this indication. We also may encounter difficulties in identifying and enrolling NASH patients with a
stage of disease appropriate for our ongoing or future clinical trials. We may not be able to initiate or continue clinical trials if we are unable to locate a sufficient number of eligible patients to participate in the clinical trials required by
the FDA or other foreign regulatory agencies. In addition, the process of finding and diagnosing patients may prove costly. Our inability to enroll a sufficient number of patients for any of our clinical trials would result in significant delays or
may require us to abandon one or more clinical trials.

Any product candidate in our current or future clinical trials may cause unacceptable adverse events or have other properties that may delay or prevent its regulatory approval or commercialization
or limit its commercial potential.

Unacceptable adverse events caused by any of our product candidates in current or future clinical trials could cause us or regulatory
authorities to interrupt, delay or halt clinical trials and could result in the denial of regulatory approval by the FDA or other regulatory authorities for any or all targeted indications and markets. This in turn could prevent us from completing
development or commercializing the affected product candidate and generating revenue from its sale. If any of our product candidates cause unacceptable adverse events in clinical trials, we may not be able to obtain regulatory approval or
commercialize such product candidate.

Our
product candidates are subject to extensive regulation, compliance with which is costly and time consuming, and such regulation may cause unanticipated delays in, or prevent the receipt of the required approvals for, commercialization of our product
candidates.

The clinical development,
manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidates are subject to extensive regulation by the FDA in the United States and by comparable foreign regulatory
agencies. In the United States, we are not permitted to market our product candidates until we receive regulatory approval from the FDA. The process of obtaining regulatory approval is expensive, often takes many years and can vary substantially
based upon the type, complexity and novelty of the products involved, as well as the target indications and patient populations. The FDA may change its approval policies or regulations, and the FDA has substantial discretion in the drug approval
process, including the ability to delay, limit or deny approval of a product candidate for many reasons. Despite the time and expense invested in clinical development of product candidates, regulatory approval is never guaranteed.

The FDA or comparable foreign regulatory authorities can
delay, limit or deny approval of a product candidate for many reasons, including the following:

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such authorities may disagree with the design or implementation of our or any of our future development partners clinical trials;

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we or any of our future development partners may be unable to demonstrate to the satisfaction of the FDA or other regulatory authorities that a product
candidate is safe and effective for any indication;

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the results of clinical trials may not demonstrate the appropriateness of the dose or the safety or efficacy required by such authorities for approval;

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we or any of our future development partners may be unable to demonstrate that a product candidates clinical and other benefits outweigh its
safety risks;

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such authorities may disagree with our interpretation or the quality of data from preclinical studies or clinical trials;

such authorities may find deficiencies in the manufacturing processes or facilities of third-party manufacturers with which we or any of our future
development partners contract for clinical and commercial supplies; or

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the approval policies or regulations of such authorities may significantly change in a manner rendering our or any of our future development
partners clinical data insufficient for approval.

With respect to foreign markets, approval procedures vary among countries and, in addition to the aforementioned risks, can involve additional product testing, administrative review periods and agreements
with pricing authorities. In addition, events raising questions about the safety of certain marketed pharmaceuticals may result in increased cautiousness by the FDA and comparable foreign regulatory authorities in reviewing new drugs based on
safety, efficacy or other regulatory considerations and may result in significant delays in obtaining regulatory approvals. Any delay in obtaining, or inability to obtain, applicable regulatory approvals would prevent us or any of our future
development partners from commercializing our product candidates.

Coverage and reimbursement may be limited or unavailable in certain market segments for CVC and other future product candidates, which could make it difficult for us to sell our product candidates
profitably.

Market acceptance and sales
of CVC and other future product candidates will depend significantly on the availability of adequate insurance coverage and reimbursement from third-party payors for any of our product candidates and may be affected by existing and future healthcare
reform measures. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs they will pay for and establish reimbursement levels. Reimbursement by a third-party payor may
depend upon a number of factors including the third-party payors determination that use of a product candidate is:

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a covered benefit under its health plan;

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safe, effective and medically necessary;

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appropriate for the specific patient;

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cost-effective; and

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neither experimental nor investigational.

Obtaining coverage and reimbursement approval for a product candidate from a government or other third-party payor is a time-consuming and
costly process that could require us to provide supporting scientific, clinical and cost effectiveness data for the use of the applicable product candidate. We may not be able to provide data sufficient to gain acceptance with respect to coverage
and reimbursement. We cannot be sure that coverage or adequate reimbursement will be available for any of our product candidates. Further, reimbursement amounts may not support the demand for, or the price of, our product candidates. If
reimbursement is not available or is available only in limited levels, we may not be able to commercialize certain of our product candidates profitably, or at all, even if approved.

As a result of legislative proposals and the trend toward managed healthcare in the United States, third-party
payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of new drugs. They may also refuse to provide coverage of approved product candidates for medical indications other than those
for which the FDA has granted market approvals. As a result, significant uncertainty exists as to whether and how much third-party payors will reimburse patients for their use of newly approved drugs, which in turn may put pressure on the pricing of
drugs or force prescribers to use generic drugs. We expect to experience pricing pressures in connection with the sale of our product candidates, if approved, due to the trend toward managed healthcare, the increasing influence of health maintenance
organizations and additional legislative proposals as well as country, regional or local healthcare budget limitations.

Even if we obtain marketing approval for CVC or any other product candidate, it could
be subject to restrictions or withdrawal from the market and will be subject to post-marketing requirements, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our
product candidates, when and if any of them are approved.

Even if U.S. regulatory approval is obtained, the FDA may still impose significant restrictions on a products indicated uses or marketing or impose ongoing requirements for potentially costly and
time consuming post-approval studies, post-market surveillance or clinical trials. Following approval, if any, of CVC or any other product candidate, such candidate will also be subject to ongoing FDA requirements governing labeling, packaging,
storage, distribution, safety surveillance, advertising, promotion, recordkeeping, reporting of safety and other post-market information, import and export. In addition, manufacturers of drug products and their facilities are subject to continual
review and periodic inspections by the FDA and other regulatory authorities for compliance with GMP requirements relating to quality control, quality assurance and corresponding maintenance of records and documents. If we or a regulatory agency
discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product, the
manufacturing facility or us, including requesting a recall or withdrawal of the product from the market or suspension of manufacturing.

If we or the manufacturing facilities for CVC, or any other product candidate that may receive regulatory approval, if any, fail to comply
with applicable regulatory requirements, a regulatory agency may:

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issue warning letters or untitled letters;

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seek an injunction or impose civil or criminal penalties or monetary fines;

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suspend or withdraw regulatory approval;

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suspend any ongoing clinical trials;

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refuse to approve pending applications or supplements or any subsequent applications or supplements we may file;

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suspend or impose restrictions on operations, including costly new manufacturing requirements; or

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seize or detain products, refuse to permit the import or export of products or request us to initiate a product recall.

The occurrence of any event or penalty described above may
inhibit our ability to commercialize our product candidates and generate revenue.

The FDA has the authority to require a risk evaluation and mitigation strategy, or REMS, as part of a NDA or after approval, which may impose further requirements or restrictions on the distribution or
use of a drug, such as limiting prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria and requiring treated patients to enroll in a registry.

In addition, if CVC or any other future product
candidates is approved, our product labeling, advertising and promotion would be subject to regulatory requirements and continuing regulatory review. The FDA strictly regulates the promotional claims that may be made about prescription products. In
particular, a product may not be promoted for uses that are not approved by the FDA as reflected in the products approved labeling. If we receive marketing approval for a product candidate, physicians may nevertheless prescribe it to their
patients in a manner that is inconsistent with the approved label. However, if we are found to have promoted such off-label uses, we may become subject to significant liability. The federal government has levied large civil and criminal fines
against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional
conduct is changed or curtailed. If we are deemed by the FDA to have engaged in the promotion of our products for off-label use, we could be subject to FDA prohibitions on the sale or marketing of our products or significant fines and penalties, and
the imposition of these sanctions could also affect our reputation and position within the industry.

Even if we receive regulatory approval for CVC or any other product candidate, we
still may not be able to successfully commercialize it, and the revenue that we generate from its sales, if any, could be limited.

Even if CVC or any other future product candidates receive regulatory approval, they may not gain market acceptance among physicians,
patients, healthcare payors or the medical community. Coverage and reimbursement of our product candidates by third-party payors, including government payors, is also generally necessary for commercial success. The degree of market acceptance of our
product candidates will depend on a number of factors, including:

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demonstration of clinical efficacy and safety compared to other more-established products;

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the limitation of our targeted patient population and other limitations or warnings contained in any FDA-approved labeling;

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acceptance of a new formulation by healthcare providers and their patients;

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the prevalence and severity of any adverse effects;

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new procedures or methods of treatment that may be more effective in treating or may reduce the incidences of NASH or other conditions for which our
products are intended to treat;

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pricing and cost-effectiveness;

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the effectiveness of our or any future collaborators sales and marketing strategies;

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our ability to obtain and maintain sufficient third-party coverage or reimbursement from government healthcare programs, including Medicare and
Medicaid, private health insurers and other third-party payors;

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unfavorable publicity relating to the product candidate; and

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the willingness of patients to pay out-of-pocket in the absence of third-party coverage.

If any product candidate is approved but does not achieve an
adequate level of acceptance by physicians, hospitals, healthcare payors or patients, we may not generate sufficient revenue from that product candidate and may not become or remain profitable. Our efforts to educate the medical community and
third-party payors on the benefits of CVC or any other future product candidates may require significant resources and may never be successful. In addition, our ability to successfully commercialize our product candidate will depend on our ability
to manufacture our products, differentiate our products from competing products and defend and enforce our intellectual property rights relating to our products.

If the market opportunity for CVC for the treatment of
NASH is smaller than we believe it is, our future revenue may be adversely affected, and our business may suffer.

If the size of the market opportunity for CVC in NASH is smaller than we anticipate, we may not be able to achieve profitability and
growth. While we are initially targeting CVC for the treatment of NASH, a disease we believe to be one of the most prevalent chronic liver diseases worldwide, our projections of the number of people who have NASH, as well as the subset of people
with the disease who have the potential to benefit from treatment with CVC, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including the scientific literature, surveys of clinics, patient
foundations and market research and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of this disease. The number of patients may turn out to be lower than expected. The effort to identify patients with
the diseases we seek to treat is in early stages, and we cannot accurately predict the number of patients for whom treatment might be possible. For example, NASH is often undiagnosed and may be left undiagnosed for a long time. A definitive
diagnosis of NASH is currently based on a histological assessment of a liver biopsy, which impacts the ability to easily identify patients. If improved diagnostic techniques for identifying NASH patients who will benefit from treatment are not
developed, our market opportunity may be smaller than we currently anticipate. Additionally, the potentially addressable patient population may be limited or may not be amenable to treatment with CVC, and new patients may become increasingly
difficult to identify or gain access to, which would adversely affect our results of operations and our business.

If we fail to develop and commercialize other product candidates, we may be unable to
grow our business.

Although the
development and commercialization of CVC is our primary focus, as part of our longer-term growth strategy, we plan to evaluate the development and commercialization of other therapies related to immune-mediated, inflammatory, orphan and other
diseases. We will evaluate internal opportunities from our compound libraries, and also may choose to in-license or acquire other product candidates as well as commercial products to treat patients suffering from immune-mediated or orphan or other
disorders with high unmet medical needs and limited treatment options. These other product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval
by the FDA and/or applicable foreign regulatory authorities. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to
be sufficiently safe and effective for approval by regulatory authorities. In addition, we cannot assure you that any such products that are approved will be manufactured or produced economically, successfully commercialized or widely accepted in
the marketplace or be more effective than other commercially available alternatives.

We rely on third parties to conduct our clinical trials. If these third parties do not meet our deadlines or otherwise conduct the trials as required, our clinical development programs could be
delayed or unsuccessful and we may not be able to obtain regulatory approval for or commercialize our product candidates when expected or at all.

We are dependent on third parties to conduct all of our clinical trials. Accordingly, the timing of the initiation and completion of these
trials is controlled by such third parties and may occur at times substantially different from our estimates. Specifically, we use CROs to conduct our clinical trials and rely on medical institutions, clinical investigators, CROs and consultants to
conduct our trials in accordance with our clinical protocols and regulatory requirements. Our CROs, investigators, and other third parties play a significant role in the conduct of these trials and subsequent collection and analysis of data.

There is no guarantee that any CROs,
investigators, or other third parties on which we rely for administration and conduct of our clinical trials will devote adequate time and resources to such trials or perform as contractually required. If any of these third parties fails to meet
expected deadlines, fails to adhere to our clinical protocols or otherwise performs in a substandard manner, our clinical trials may be extended, delayed or terminated. If any of our clinical trial sites terminates for any reason, we may experience
the loss of follow-up information on subjects enrolled in our ongoing clinical trials unless we are able to transfer those subjects to another qualified clinical trial site. In addition, principal investigators for our clinical trials may serve as
scientific advisors or consultants to us from time to time and may receive cash or equity compensation in connection with such services. If these relationships and any related compensation result in perceived or actual conflicts of interest, or if
we fail to adequately disclose such compensation pursuant to FDA regulations, the integrity of the data generated at the applicable clinical trial site may be jeopardized.

We rely on third parties to supply the components of
and manufacture CVC for our clinical trials and commercialization, which is a complex process. Our dependence on third parties could adversely impact our business.

We are dependent on third-parties to supply the components
of and manufacture CVC. If these third-party suppliers do not supply sufficient quantities of materials to us on a timely basis and in accordance with applicable specifications, GMP regulations and other regulatory requirements, there could be a
significant interruption of our supplies, which would adversely affect clinical development of the product candidate. Furthermore, if any of our contract manufacturers cannot successfully manufacture material that conforms to our specifications and
within regulatory requirements, we will not be able to secure and/or maintain regulatory approval, if any, for our product candidates.

We will also rely on our contract manufacturers to purchase from third-party suppliers the materials necessary to produce our product
candidates for our anticipated clinical trials. We do not have any control over

the process or timing of the acquisition of raw materials by our contract manufacturers. Moreover, we currently do not have agreements in place for the commercial production of these raw
materials. Any significant delay in the supply of a product candidate or the raw material components thereof for an ongoing clinical trial could considerably delay completion of that clinical trial, product candidate testing and potential regulatory
approval of that product candidate.

We do not
expect to have the resources or capacity to commercially manufacture CVC or any other future product candidates, if approved, and will likely continue to be dependent on third-party manufacturers. Our dependence on third parties to manufacture and
supply us with clinical trial materials and any approved product candidates may adversely affect our ability to develop and commercialize our product candidates on a timely basis.

The process of drug manufacturing is complex, highly
regulated and subject to several risks, including:

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The manufacturing of compounds is complex, and only a limited number of manufacturers will be capable of manufacturing CVC and other future product
candidates.

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The manufacturing of compounds is susceptible to product loss due to contamination, equipment failure, improper installation or operation of equipment
or vendor or operator error. Even minor deviations from normal manufacturing processes could result in reduced production yields, product defects and other supply disruptions. If microbial, viral or other contaminations are discovered in our
products or in the manufacturing facilities in which our products are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

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The manufacturing facilities in which CVC and other future product candidates are made could be adversely affected by labor shortages, natural
disasters, power failures and numerous other factors.

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We and our contract manufacturers must comply with GMP regulations and guidelines. Although we are ultimately responsible for ensuring that our product
candidates are manufactured in accordance with GMP regulations and guidance, we are not involved in the day-to-day operations of our contract manufacturers. We and our contract manufacturers may encounter difficulties in achieving quality control
and quality assurance and may experience shortages in qualified personnel. We and our contract manufacturers are subject to inspections by the FDA and comparable agencies in other jurisdictions to confirm compliance with applicable regulatory
requirements. Any failure to follow GMP or other regulatory requirements or any delay, interruption or other issues that arise in the manufacture, fill-finish, packaging or storage of our products as a result of a failure of our facilities or the
facilities or operations of third parties to comply with regulatory requirements or pass any regulatory authority inspection could significantly impair our ability to develop and commercialize our product candidates, including leading to significant
delays in the availability of product candidates for our clinical studies or the termination or hold on a clinical study or the delay or prevention of filing or approval of marketing applications for our product candidates. Significant noncompliance
could also result in the imposition of sanctions, including warning or untitled letters, fines, injunctions, civil penalties, failure of regulatory authorities to grant marketing approvals for our product candidates, delays, suspension or withdrawal
of approvals, license revocation, seizures or recalls of products, operating restrictions and criminal prosecutions, any of which could be costly and damage our reputation. If we are not able to maintain regulatory compliance, we may not be
permitted to market our product candidates and/or may be subject to product recalls, seizures, injunctions, or criminal prosecution.

Any adverse developments affecting manufacturing operations for our products may result in shipment delays, inventory shortages, lot
failures, product withdrawals or recalls, or other interruptions in the supply of our products. We may also have to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly
remediation efforts or seek more costly manufacturing alternatives.

We may not be successful in establishing and maintaining development or other
strategic partnerships, which could adversely affect our ability to develop and commercialize product candidates.

We may choose to enter into development or other strategic partnerships in the future, including collaborations with major biotechnology
or pharmaceutical companies. For example, we intend to pursue a Phase 3 clinical trial of CVC for the treatment of HIV in collaboration with a strategic partner. The negotiation process for a collaboration of this type is time consuming and
complex. We may not be successful in our efforts to establish a development partnership or other alternative arrangements for any of our product candidates and programs. Even if we are successful in our efforts to establish development partnerships,
the terms that we agree upon may not be favorable to us, and we may not be able to maintain such development partnerships if, for example, development or approval of a product candidate is delayed or sales of an approved product candidate are
disappointing. Any delay in entering into development partnership agreements related to our product candidates could delay the development and commercialization of our product candidates and reduce their competitiveness if they reach the market.

In addition, our strategic partners may terminate
any agreements they enter into with us, and we may not be able to adequately protect our rights under these agreements. Furthermore, our strategic partners will likely negotiate for certain rights to control decisions regarding the development and
commercialization of our product candidates, if approved, and may not conduct those activities in the same manner as we do.

Moreover, if we fail to maintain development or other strategic partnerships related to our product candidates that we may choose to enter
into, then:



the development of certain of our current or future product candidates may be terminated or delayed;



our cash expenditures related to development of certain of our current or future product candidates would increase significantly, and we may need to
seek additional financing;



we may be required to hire additional employees or otherwise develop expertise, such as sales and marketing expertise, for which we have not budgeted;
and

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we will bear all of the risk related to the development of any such product candidates.

We may form strategic alliances in the future, and we
may not realize the benefits of such alliances.

We may form strategic alliances, create joint ventures or collaborations or enter into licensing arrangements with third parties that we believe will complement or augment our existing business, including
for the continued development or commercialization of CVC or other future product candidates. These relationships or those like them may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue
securities that dilute our existing stockholders or disrupt our management and business. In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. We cannot be
certain that, following a strategic transaction or license, we will achieve the revenues or specific net income that justifies such transaction.

If our competitors develop treatments for the target indications of our product candidates that are approved more quickly than ours,
marketed more successfully or demonstrated to be safer or more effective than our product candidates, our commercial opportunity will be reduced or eliminated.

We operate in highly competitive segments of the
biotechnology and biopharmaceutical markets. We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies and private and public research institutions.
Our product candidates, if successfully developed and approved, may compete with established therapies as well as with new treatments that may be introduced by our competitors. Many of our competitors have significantly greater financial, product
candidate development, manufacturing and marketing resources than we do. Large pharmaceutical and biotechnology companies have extensive experience in clinical testing and obtaining regulatory approval for drugs. In addition, universities and
private and public research institutes may be active in research in our target indications, and they or their licensees could be in direct competition with us. We also may compete with these

organizations to recruit management, scientists and clinical development personnel. We will also face competition from these third parties in establishing clinical trial sites, registering
subjects for clinical trials and in identifying and in-licensing new product candidates. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established
companies. Additionally, we may face competition from developing countries, where costs may be cheaper.

New developments, including the development of other pharmaceutical technologies and methods of treating disease, occur in the
pharmaceutical and life sciences industries at a rapid pace. Developments by competitors may render our product candidates obsolete or noncompetitive. Competition in drug development is intense. We anticipate that we will face intense and increasing
competition as new treatments enter the market and advanced technologies become available.

There are currently no therapeutic products approved for the treatment of NASH. There are several commercially available products that are currently used off label for NASH, such as vitamin E (an
antioxidant), insulin sensitizers (such as metformin), antihyperlipidemic agents (such as gemfibrozil), pentoxifylline, ursodiol and others. In addition, there are numerous drugs in development for the treatment of NASH. We are aware of several
companies that have product candidates in clinical development for the treatment of NASH, including Intercept Pharmaceuticals, Inc., Gilead Sciences, Inc., Galectin Therapeutics Inc., Galmed Medical Research Ltd., Genfit Corp., Novartis AG, Novo
Nordisk A/S, Takeda, Raptor Pharmaceutical Corp., Immuron Ltd., Shire plc and Conatus Pharmaceuticals Inc., and there are other companies with candidates in earlier stage development.

In HIV, we are aware of several companies that market therapies, including single tablet regimen Atripla,
Complera, Stribild and Triumeq (commercialized by Bristol-Myers Squibb Company, Gilead Sciences Inc., Janssen Pharmaceuticals Inc. and ViiV Healthcare), NRTI backbones Truvada and Epzicom (commercialized by Gilead Sciences Inc. and ViiV Healthcare)
and multiple single agent products in the integrase inhibitor, protease inhibitor and NNRTI class, as well as CCR5 inhibitor maraviroc (commercialized by ViiV Healthcare). Other companies are also developing novel HIV therapies and vaccines.

Even if we obtain regulatory approval for
our product candidates, the availability and price of our competitors products could limit the demand or the price we are able to charge, for our product candidates. Several generic products are already available and more will become available
for the indications we are targeting with our product candidates. Our business will be harmed if the acceptance of our product candidates is inhibited by price competition or the reluctance of physicians to switch from existing methods of treatment
to our product candidates, or if physicians switch to other new drug products or choose to reserve our product candidates for use in limited circumstances. Our inability to compete with existing or subsequently introduced drug products would have a
material adverse impact on our business.

We
have no sales, marketing, reimbursement or distribution capabilities, and we will have to invest significant resources to develop these capabilities.

We have no internal sales, marketing, reimbursement or distribution capabilities. If CVC or any other future product candidates ultimately
receives regulatory approval, we may not be able to effectively market and distribute the product candidate. We will have to invest significant amounts of financial and management resources to develop internal sales, distribution and marketing
capabilities, some of which will be committed prior to any confirmation that CVC or any other future product candidates will be approved, if at all. We may not be able to hire consultants or external service providers to assist us in sales,
marketing, reimbursement and distribution functions on acceptable financial terms or at all. Even if we decide to establish sales, marketing, reimbursement and distribution functions, we could face a number of additional related risks, including the
following:

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we may not be able to attract and build an effective marketing department or sales force;

the cost of establishing a marketing department or sales force may exceed our available financial resources and the revenues generated by CVC or any
other product candidates that we may develop, in-license or acquire; and



our direct sales, reimbursement and marketing efforts may not be successful.

If we lose key scientists or management personnel, or if we fail to recruit additional highly skilled
personnel, it will impair our ability to identify, develop and commercialize products.

We are highly dependent on principal members of our management team and scientific staff, including our Chief Executive Officer, Laurent Fischer, M.D., and our Chief Medical Officer, Éric Lefebvre,
M.D. These executives each have significant pharmaceutical industry experience. The loss of any member of our management team or scientific staff, including Drs. Fischer and Lefebvre, would impair our ability to identify, develop and market new
products. Our management and other employees may voluntarily terminate their employment with us at any time. The loss of the services of these or other key personnel, or the inability to attract and retain additional qualified personnel, could
result in delays to development or approval, loss of sales and diversion of management resources. In addition, we depend on our ability to attract and retain other highly skilled personnel. Competition for qualified personnel is intense, and the
process of hiring and integrating such qualified personnel is often lengthy. We may be unable to recruit such personnel on a timely basis, if at all, which would negatively impact our development and commercialization programs.

Additionally, we do not currently maintain key
person life insurance on the lives of our executives or any of our employees. This lack of insurance means that we may not receive adequate compensation for the loss of the services of these individuals.

If we fail to effectively integrate our new executive
officers into our organization, the future development and commercialization of our product candidates may suffer, harming future regulatory approvals, sales of our product candidates or our results of operations.

Our current management team has only been working together
for a relatively short period of time and our Chief Executive Officer and Chief Financial Officer have been employed by us for less than a year. Moreover, we expect to continue to expand our team in the future. Our future performance will depend, in
part, on our ability to successfully integrate recently and subsequently hired executive officers into our management team and their ability to develop and maintain an effective working relationship. Our failure to integrate these individuals with
other members of management could result in inefficiencies or failures in the development and commercialization of our product candidates.

We may encounter difficulties in managing our growth and expanding our operations successfully.

As of September 30, 2014, we had 13 full-time employees.
We will need to grow our organization substantially to continue development and pursue the potential commercialization of CVC and other future product candidates, as well as function as a public company. As we seek to advance CVC and other product
candidates, we will need to expand our financial, development, regulatory, manufacturing, marketing and sales capabilities or contract with third parties to provide these capabilities for us. As our operations expand, we expect that we will need to
manage additional relationships with various strategic partners, suppliers and other third parties. Future growth will impose significant added responsibilities on members of management and require us to retain additional internal capabilities. Our
future financial performance and our ability to commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to manage our development
efforts and clinical trials effectively and hire, train and integrate additional management, clinical and regulatory, financial, administrative and sales and marketing personnel. We may not be able to accomplish these tasks, and our failure to so
accomplish could prevent us from successfully growing our company.

Recently enacted and future legislation may increase the difficulty and cost for us to
obtain marketing approval of and commercialize our product candidates and may affect the prices we may obtain.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes
regarding healthcare systems that could prevent or delay marketing approval for our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our product candidates.

Legislative and regulatory proposals have been made to expand
post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We are not sure whether additional legislative changes will be enacted, or whether the FDA or other agency regulations, guidance or interpretations
will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the United States Congress of the FDAs approval process may significantly delay or
prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements.

In the United States, the Medicare Modernization Act of 2003, or MMA, changed the way Medicare covers and pays for pharmaceutical
products. The legislation expanded Medicare coverage for outpatient prescription drug purchases by the elderly with a new Part D program. In addition, this legislation authorized Medicare Part D prescription drug plans to use formulas where
they can limit the number of drugs that will be covered in any therapeutic class. Notwithstanding the expansion of federal coverage of drug products, there is pressure to contain and reduce costs.

More recently, in March 2010, President Obama signed into law
the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, which is a sweeping law intended to broaden access to health insurance, reduce or constrain the
growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
The Affordable Care Act, among other things:

revised the definition of average manufacturer price for Medicaid drug rebate reporting purposes, which could increase the amount of
Medicaid drug rebates due to states;



required manufacturers to participate in a coverage gap discount program, under which they must agree to offer 50% point-of-sale discounts off
negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers outpatient drugs to be covered under Medicare Part D; and



mandated a further shift in the burden of Medicaid payments to the states.

Although it is too early to determine the full effect of the Affordable Care Act on our business, the law
appears likely to continue the pressure on pharmaceutical pricing, especially under Medicare, and may also increase our regulatory burdens and operating costs.

Other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. On August 2, 2011, the President
signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend proposals in spending reductions to Congress. The Joint Select Committee did not achieve its targeted
deficit reduction of at least $1.2 trillion for the

years 2013 through 2021, triggering the legislations automatic reductions to several government programs. These reductions include aggregate reductions to Medicare payments to providers,
managed care organizations, and prescription drug plan sponsors, of 2% per fiscal year, which went into effect on April 1, 2013.

There likely will continue to be legislative and regulatory proposals at the federal and state levels directed at containing or lowering
the cost of healthcare. We cannot predict the initiatives that may be adopted in the future or their full impact. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to
contain or reduce costs of healthcare may adversely affect:

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the demand for any product candidates for which we may obtain regulatory approval;



our ability to set a price that we believe is fair for our product candidates;



our ability to generate revenue and achieve or maintain profitability;



the level of taxes that we are required to pay; and

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the availability of capital.

If we fail to comply with healthcare regulations, we could face substantial penalties and our business, results of operations and
financial condition could be adversely affected.

Certain federal and state healthcare laws and regulations pertaining to fraud and abuse and patients rights are and will be applicable to our business. We could be subject to healthcare fraud and
abuse and patient privacy laws and regulations by both the federal government and the states in which we conduct our business. Because of the breadth of these laws and the narrowness of the safe harbors, it is possible that some of our business
activities could be subject to challenge under one or more of these laws. The regulations that may affect our ability to operate include, without limitation:



The federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, false
claims, or knowingly using false statements, to obtain payment from the federal government, and which may apply to entities that provide coding and billing advice to customers;



The federal Anti-Kickback Statute, which prohibits, among other things, any person from knowingly and willfully offering, paying, soliciting or
receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formula managers on the other;



federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare
matters;



the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and
Clinical Health Act, and its implementing regulations, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; and



state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by
any third-party payor, including commercial insurers.

Although there are several statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution under the Anti-Kickback Statute, the exemptions and safe harbors are drawn
narrowly, and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exemption or safe harbor. We have consulting arrangements with physicians who
provide various services to us. Payment for some of these consulting services is not made on a per-hour basis. Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability.

Recent legislation has strengthened the above laws. The Affordable Care Act, among other
things, amends the intent requirement of the Federal Anti-Kickback Statute and criminal healthcare fraud statutes. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the
Affordable Care Act provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

The Affordable Care Act also imposes new
reporting and disclosure requirements on drug manufacturers for any transfer of value made or distributed to prescribers and other healthcare providers. In addition, drug manufacturers will also be required to report and disclose any
investment interests held by physicians and their immediate family members during the preceding calendar year. Failure to submit required information may result in civil monetary penalties of up to an aggregate of $150,000 per year (and up to an
aggregate of $1.0 million per year for knowing failures), for all payments, transfers of value or ownership or investment interests not reported in an annual submission.

In addition, there has been a recent trend of increased federal and state regulation of payments made to
physicians for marketing. Some states mandate implementation of compliance programs and/or the tracking and reporting of gifts, compensation, and other remuneration to physicians. The need to build and maintain a robust compliance program with
different compliance and/or reporting requirements increases the possibility that a healthcare company may violate one or more of the requirements.

If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that
apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, imprisonment, and the curtailment or restructuring of
our operations, any of which could adversely affect our ability to operate our business and our financial results. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant
legal expenses and divert our managements attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal and state privacy, security and fraud laws may prove costly.

We intend to seek approval to market our product candidates in both the United States and in foreign jurisdictions. If we obtain approval
in one or more foreign jurisdictions, we will be subject to rules and regulations in those jurisdictions relating to our product candidates. In many foreign countries the pricing of prescription pharmaceuticals is subject to governmental control. In
these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product candidate. If reimbursement of our future products is unavailable or limited in scope or amount, or
if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of CVC or other future product candidates.

We face an inherent risk of product
liability as a result of the clinical testing of CVC and other future product candidates and will face an even greater risk if we commercialize our product candidates. For example, we may be sued if CVC or our other product candidates allegedly
cause injury or are found to be otherwise unsuitable during product testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers
inherent in the product candidate, negligence, strict liability and a breach of warranties. Claims could also be asserted under state consumer protection acts.

If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit
or cease the commercialization of our product candidates. Even a successful

the inability to commercialize CVC or our other product candidates; and



a decline in our stock price.

We maintain clinical trial insurance with $10.0 million in coverage in the United States and local policies in other countries, which we
believe is sufficient to cover foreseeable claims that may be made against us and is customary for similarly situated companies in our industry. However, we cannot be certain that such insurance will be sufficient to cover all claims that may be
made against us and any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage. Our
insurance policies also have various exclusions, and we may be subject to a claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not
covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Furthermore, our inability to obtain and retain sufficient clinical trial insurance at an acceptable cost to protect against potential
liability claims could prevent or inhibit the commercialization of CVC or our other product candidates.

Our term loan with Oxford contains restrictions that may limit our flexibility in operating our business.

In June 2014, we entered into a loan and security agreement
with Oxford Finance LLC, or Oxford, pursuant to which we borrowed an aggregate principal amount of $15.0 million. Amounts outstanding under the term loan are secured by all of our existing and future assets, excluding intellectual property unless
otherwise determined by applicable judicial authority. The agreement contains various covenants that require Oxfords approval to engage in specified types of transactions. These covenants require approval to, among other things:



incur or assume certain debt;



merge or consolidate;



change the nature of our business;



dispose of certain assets;



grant liens on our assets including our intellectual property;



make certain investments;



pay dividends; and



enter into material transactions with affiliates.

A breach of any of these covenants or a material adverse
change to our business could result in a default under the loan. In the case of an event of default under the loan, Oxford could elect to declare all amounts outstanding to be immediately due and payable, commence and prosecute bankruptcy and/or
other insolvency proceedings, or proceed against the collateral granted to Oxford as security for the loan.

We and any of our future development partners will be required to report to regulatory
authorities if any approved products cause or contribute to adverse events, and any failure to do so would result in sanctions that would materially harm our business.

If we and any of our future development partners are
successful in commercializing our products, the FDA and foreign regulatory authorities would require that we and any of our future development partners report certain information about adverse medical events if those products may have caused or
contributed to those adverse events. The timing of our obligation to report would be triggered by the date we become aware of the adverse event as well as the nature of the event. We and any of our future development partners may fail to report
adverse events we become aware of within the prescribed timeframe or we may fail to receive notice of such events from our CROs within the prescribed time period. We and any of our future development partners may also fail to appreciate that we have
become aware of a reportable adverse event, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the use of our products. If we and any of our future development partners
fail to comply with our reporting obligations, the FDA or a foreign regulatory authority could take action, including criminal prosecution, the imposition of civil monetary penalties, seizure of our products or delay in approval of future products.

Our internal computer systems, or those of
our development partners, third-party CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Despite the implementation of security measures, our
internal computer systems and those of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication
and electrical failures. While we have not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our
development programs and our business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or
reproduce the data. Likewise, we rely on third parties to manufacture our product candidates and conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent
that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and
commercialization of our product candidate could be delayed.

Our operations could be subject to earthquakes, power shortages, telecommunications failures, water shortages,
floods, hurricanes, fires, extreme weather conditions, medical epidemics and other natural or manmade disasters or business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could
seriously harm our operations and financial condition and increase our costs and expenses. We rely on third-party manufacturers to produce CVC and our other product candidates. Our ability to obtain clinical supplies of CVC or our other product
candidates could be disrupted if the operations of these suppliers are affected similarly.

Our rights to develop and commercialize our product candidates are subject in part to the terms and
conditions of a license to CVC granted to us by Takeda.

CVC is based in part on patents that we have licensed on an exclusive basis and other intellectual property licensed from Takeda Pharmaceutical Company Limited, or Takeda. Takeda holds certain rights with
respect to CVC in the license agreement. This license imposes various commercial, contingent payment, royalty, insurance, indemnification, and other obligations on us. If we fail to comply with these obligations, the licensor may have the right to
terminate the license, in which event we would lose valuable rights under our collaboration agreements and our ability to develop product candidates.

Either party may terminate the license agreement under certain circumstances, including a material breach of the agreement by the other.
In the event we terminate our license, or if Takeda terminates our license due to our breach, all rights to CVC, including any intellectual property we develop with respect to CVC or licensed or developed by us under this agreement will revert or
otherwise be licensed back to Takeda on an exclusive basis. Any termination or reversion to Takeda of our rights to develop or commercialize CVC, including any reacquisition by Takeda of our rights, will have a material adverse effect on our
business.

We may fail to comply with any of
our obligations under existing agreements pursuant to which we license rights or technology, which could result in the loss of rights or technology that are material to our business.

We are a party to a license agreement with Takeda that is important to our business, and we may enter into
additional licenses in the future. Under our agreement from Takeda, Takeda has assigned and licensed to us certain patents and know-how relating to CVC. This license agreement imposes various commercial, contingent payment, royalty, insurance,
indemnification, and other obligations on us. If we fail to comply with these obligations, Takeda may have the right to terminate the license agreement, in which event we would lose valuable rights to CVC and would be unable to develop or market
CVC.

With respect to certain patents under our
license agreement with Takeda and in some cases with respect to any license we may enter into in the future, patent prosecution of our licensed technology is controlled solely by the licensor. If our licensors fail to obtain and maintain patent or
other protection for the proprietary intellectual property we license from them, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, and our competitors could market competing products using the
intellectual property. In certain cases, including with respect to the patents assigned to us from Takeda, we control the prosecution of patents resulting from licensed or assigned technology. In the event we breach any of our obligations related to
such prosecution, we may incur significant liability to our licensing partners. Licensing of intellectual property is of critical importance to our business and involves complex legal, business, and scientific issues. Disputes may arise regarding
intellectual property subject to a licensing agreement, including but not limited to:



the scope of rights granted under the license agreement and other interpretation-related issues;



the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;



the sublicensing of patent and other rights;

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our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

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the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our
collaborators; and

If disputes over intellectual property and other rights that we have licensed or acquired
from third parties prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

Our commercial success depends in part on our ability to obtain and maintain patent protection and trade secret protection for our product candidates, proprietary technologies, and their uses as well as
our ability to operate without infringing upon the proprietary rights of others. We can provide no assurance that our patent applications or those of our licensors will result in additional patents being issued or that issued patents will afford
sufficient protection against competitors with similar technology, nor can there be any assurance that the patents issued will not be infringed, designed around or invalidated by third parties. Even issued patents may later be found unenforceable or
may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. The degree of future protection for our proprietary rights is uncertain. Only limited protection may be available and may not
adequately protect our rights or permit us to gain or keep any competitive advantage. This failure to properly protect the intellectual property rights relating to our product candidates could have a material adverse effect on our financial
condition and results of operations.

Composition-of-matter patents on the biological or chemical active pharmaceutical ingredient are generally considered to be the strongest
form of intellectual property provide the broadest scope of patent protection for pharmaceutical products, as such patents provide protection without regard to any method of use. While we have issued composition-of-matter patents in the United
States and other countries for CVC, we cannot be certain that the claims in our issued composition-of-matter patents will not be found invalid or unenforceable if challenged. We cannot be certain that the claims in our patent applications
covering composition-of-matter or formulations of our other product candidates will be considered patentable by the United States Patent and Trademark Office, or USPTO, and courts in the United States or by the patent offices and courts in foreign
countries, nor can we be certain that the claims in our issued composition-of-matter patents will not be found invalid or unenforceable if challenged. Even if our patent applications covering formulations of our product candidates issue as patents,
the formulation patents protect a specific formulation of a product and may not be enforced against competitors making and marketing a product that has the same active pharmaceutical ingredient in a different formulation. Method-of-use patents
protect the use of a product for the specified method or for treatment of a particular indication. This type of patent may not be enforced against competitors making and marketing a product that has the same active pharmaceutical ingredient but used
for a method not included in the patent. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products off-label. Although off-label prescriptions may infringe
or contribute to the infringement of method-of-use patents, the practice is common and such infringement is difficult to prevent or prosecute.

Our issued composition of matter patents for CVC are expected to expire in the United States as early as 2023. Our additional patents and
pending patent applications that cover formulations, combination products and use of CVC to treat various indications are expected to expire at various times that range from 2023 (for issued patents) to potentially 2035 (for currently-filed
provisional patent applications if patents were to issue on non-provisional applications filed thereon).

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our future
development partners will be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties include the following:

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the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other
provisions during the patent process. There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an
event, competitors might be able to enter the market earlier than would otherwise have been the case;

patents that may be issued or in-licensed may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may
not provide any competitive advantage;



our competitors, many of whom have substantially greater resources than we do and many of whom have made significant investments in competing
technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate our ability to make, use, and sell our potential product candidates;



there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and
outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and

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countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors
a better opportunity to create, develop and market competing product candidates.

In addition, we rely on the protection of our trade secrets and proprietary know-how. Although we have taken steps to protect our trade secrets and unpatented know-how, including entering into
confidentiality agreements with third parties, and confidential information and inventions agreements with employees, consultants and advisors, we cannot provide any assurances that all such agreements have been duly executed, and third parties may
still obtain this information or may come upon this or similar information independently. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for
misappropriating our trade secrets. If any of these events occurs or if we otherwise lose protection for our trade secrets or proprietary know-how, our business may be harmed.

Recent patent reform legislation could increase the
uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes
a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications will be prosecuted and may also affect patent litigation. In particular, under the Leahy-Smith Act, the United States transitioned
in March 2013 to a first to file system in which the first inventor to file a patent application will be entitled to the patent. Third parties are allowed to submit prior art before the issuance of a patent by the USPTO, in
which case a patent may become subject to post-grant proceedings including opposition, derivation, reexamination, inter-partes review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination
in any such submission, proceeding or litigation could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position.

Claims by third parties that we infringe their proprietary rights may result in liability for damages or
prevent or delay our developmental and commercialization efforts.

The biotechnology industry has been characterized by frequent litigation regarding patent and other intellectual property rights. Numerous U.S. and foreign issued patents and pending patent applications,
which are owned by third parties, exist in the fields in which we are developing product candidates. As the biotechnology industry expands and more patents are issued, the risk increases that our product candidates may be subject to claims of
infringement of the patent rights of third parties. Because patent applications are maintained in secrecy until the application is published, we may be unaware of third party patents that may be infringed by commercialization of CVC or our other
product candidates. Moreover, because patent applications can take many years to issue, there may be currently-pending patent applications that may later result in issued patents that our product candidates may infringe. In addition, identification
of third party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among patents,

incomplete databases and the difficulty in assessing the meaning of patent claims. Any claims of patent infringement asserted by third parties would be time consuming and could likely:



result in costly litigation;

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divert the time and attention of our technical personnel and management;

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cause development delays;



prevent us from commercializing CVC or our other product candidates until the asserted patent expires or is held finally invalid or not infringed in a
court of law;

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require us to develop non-infringing technology, which may not be possible on a cost-effective basis; or

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require us to enter into royalty or licensing agreements.

Although no third party has asserted a claim of patent
infringement against us as of the date of this prospectus, others may hold proprietary rights that could prevent CVC or our other product candidates from being marketed. Any patent-related legal action against us claiming damages and seeking to
enjoin commercial activities relating to our product candidate or processes could subject us to potential liability for damages and require us to obtain a license to continue to manufacture or market CVC or our other product candidates. We cannot
predict whether we would prevail in any such actions or that any license required under any of these patents would be made available on commercially acceptable terms, if at all. In addition, we cannot be sure that we could redesign our product
candidate or processes to avoid infringement, if necessary. Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing CVC or
our other product candidates, which could harm our business, financial condition and operating results.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time
consuming, and unsuccessful. Further, our issued patents could be found invalid or unenforceable if challenged in court.

If we or any of our future development partners were to initiate legal proceedings against a third party to enforce a patent directed at
one of our product candidates, or one of our future product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or
unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement or insufficient written description. Grounds for an
unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution. Third parties may also raise similar claims
before the USPTO, even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no
invalidating prior art of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent
protection on such product candidate. Such a loss of patent protection would have a material adverse impact on our business.

Interference proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of
inventions with respect to our patents or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business
could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management
and other employees. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary
technology from third parties, or enter into development partnerships that would help us bring our product candidates to market.

Furthermore, because of the substantial amount of discovery required in connection with
intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other
interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.

We may not be successful in obtaining or maintaining necessary rights to our product candidates through
acquisitions and in-licenses.

We
currently have rights to the intellectual property, through licenses from third parties and under patents that we own, to develop our product candidates. Because our programs may require the use of proprietary rights held by third parties, the
growth of our business may depend in part on our ability to acquire, in-license, or use these proprietary rights. For example, our product candidates may require specific formulations to work effectively and efficiently and the rights to these
formulations may be held by others. We may be unable to acquire or in-license any compositions, methods of use, processes, or other third-party intellectual property rights from third parties that we identify as necessary for our product candidates.
The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may
consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a
competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.

We may collaborate with U.S. and foreign academic
institutions to accelerate our preclinical or clinical research. Typically, these institutions provide us with an option to negotiate a license to any of the institutions rights in technology resulting from the collaboration. Regardless of
such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially
blocking our ability to pursue our program.

If we
are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of that program and our business and financial condition
could suffer.

We may be subject to claims
that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers.

As is common in the biotechnology and pharmaceutical
industry, we engage the services of consultants, in addition to our employees, to assist us in the development of our product candidates. Many of these employees and consultants, and many of our employees, were previously employed at, or may have
previously provided or may be currently providing consulting services to, other biotechnology or pharmaceutical companies including our competitors or potential competitors. We may become subject to claims that our company, our employees or a
consultant inadvertently or otherwise used or disclosed trade secrets or other information proprietary to their former employers or their former or current clients. Litigation may be necessary to defend against these claims. If we fail in defending
any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against these claims, litigation could result
in substantial costs and be a distraction to our management team.

Our reliance on third parties requires us to share our trade secrets, which increases
the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

Because we rely on third parties to research and develop and to manufacture our product candidates, we must, at times, share trade secrets
with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees,
third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets.
Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently
incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitors discovery of our trade secrets or
other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.

In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to
publish data potentially relating to our trade secrets, although our agreements may contain certain limited publication rights. For example, any academic institution that we may collaborate with in the future will usually expect to be granted rights
to publish data arising out of such collaboration, provided that we are notified in advance and given the opportunity to delay publication for a limited time period in order for us to secure patent protection of intellectual property rights arising
from the collaboration, in addition to the opportunity to remove confidential or trade secret information from any such publication. In the future we may also conduct joint research and development programs that may require us to share trade secrets
under the terms of our research and development or similar agreements. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent
development or publication of information by any of our third-party collaborators. A competitors discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.

If we do not obtain protection under the Hatch-Waxman
Amendments by extending the patent terms for CVC or our other product candidates, our business may be materially harmed.

Depending upon the timing, duration and specifics of FDA marketing approval of CVC or other product candidates, one or more of our United
States patents may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments permit a patent restoration term of
up to five years as compensation for patent term lost during product development and the FDA regulatory review process. However, we may not be granted an extension because of, for example, failing to apply within applicable deadlines, failing to
apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain patent
term extension or restoration or the term of any such extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, and our revenue could be reduced, possibly materially.

If our trademarks and trade names are not adequately
protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our registered or unregistered trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to
be infringing on other marks. We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest. At times, competitors may adopt
trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be

potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or
trade names. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our
proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our financial condition
or results of operations.

We may not be
able to protect our intellectual property rights throughout the world.

While we have issued composition-of-matter patents directed at CVC in the United States and other countries, filing, prosecuting and defending patents on CVC and our other product candidates in all
countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries
may not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or
from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and,
further, may export otherwise infringing products to territories where we have patent protection but enforcement is not as strong as that in the United States. These products may compete with our product candidates, and our patents or other
intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain
developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of
competing products in violation of our proprietary rights generally. For example, India and China have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. Although we currently do not have issued
patents in these particular jurisdictions, to the extent we are able to obtain such patents, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to a third party. Proceedings to enforce our patent
rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk
of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to
enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Risks Related to Our Financial Position and Need for Capital

Our independent registered public
accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements.

Our independent registered public accounting firm included
an explanatory paragraph in its report on our financial statements for the year ended December 31, 2013 stating that our recurring net losses, working capital deficit and net capital deficiency at December 31, 2013 raise substantial doubt
about our ability to continue as a going concern. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected and we may be unable to continue as a
going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and it is likely that investors will lose all or a
part of their investment. We may also be forced to make reductions in spending, including delaying

or curtailing our ongoing or future clinical programs, or to extend payment terms with our suppliers or licensors. Future reports from our independent registered public accounting firm may also
contain statements expressing doubt about our ability to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains doubt about our ability to continue as a going concern, investors
or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all.

If we fail to obtain the capital necessary to fund our operations, we will be unable to successfully develop and commercialize CVC
and other future product candidates.

Although we believe that the anticipated net proceeds from this offering, together with our existing cash and cash equivalents, will be
sufficient to fund our current operations through at least the second quarter of 2016, we will require substantial future capital in order to complete the remaining clinical development for CVC and our other product candidates and to potentially
commercialize these product candidates. In particular, in order to initiate our Phase 3 clinical program for CVC in HIV we will need to collaborate with a strategic partner or raise significant non-dilutive financing. We expect our spending levels
to increase in connection with our clinical trials of CVC, as well as other corporate activities. The amount and timing of any expenditure needed to implement our development and commercialization programs will depend on numerous factors, including:



the type, number, scope, progress, expansion costs, results of and timing of our ongoing or future clinical trials or the need for additional clinical
trials of CVC for NASH or any of our other product candidates which we are pursuing or may choose to pursue in the future;



the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights;



the costs and timing of obtaining or maintaining manufacturing for CVC for NASH and any of our other product candidates, including commercial
manufacturing if any product candidate is approved;



the costs and timing of establishing sales marketing, and reimbursement capabilities and enhanced internal controls over financial reporting;

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the terms and timing of establishing and maintaining collaborations, license agreements and other partnerships;

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costs associated with any new product candidates that we may develop, in-license or acquire;

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the effect of competing technological and market developments; and



the costs associated with being a public company.

Some of these factors are outside of our control. We do not
expect our existing capital resources together with the net proceeds from this offering to be sufficient to enable us to fund the completion of our clinical trials and commercialization of our product candidates. We expect that we will need to raise
additional funds in the future.

We have not sold
any products, and we do not expect to sell or derive revenue from any product sales for the foreseeable future. We may seek additional funding through future debt and equity financing, as well as potential additional collaborations or strategic
partnerships with other companies or through non-dilutive financings. Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our
stockholders. In addition, the issuance of additional shares by us, or the possibility of such issuance, may cause the market price of our shares to decline.

If we are unable to obtain funding on a timely basis, we will be unable to complete ongoing and planned clinical trials for CVC for
NASH and any of our other product candidates and we may be required to significantly curtail some or all of our activities. We also could be required to seek funds through arrangements with collaborative partners or otherwise that may require us to
relinquish rights to our product candidates or some of our technologies or otherwise agree to terms unfavorable to us.

Our ability to use net operating loss and tax credit carryforwards and certain
built-in losses to reduce future tax payments may be limited by provisions of the Internal Revenue Code, and may be subject to further limitation as a result of the transactions contemplated by this offering.

As of December 31, 2013, we had federal and state tax
net operating loss carryforwards of approximately $75.3 million and $28.8 million, respectively, which begin to expire in 2023 for federal and 2015 for state unless previously utilized. As of December 31, 2013, we had federal and California
research and development tax credit carryforwards of approximately $0.7 million and $0.2 million, respectively. The federal research and development tax credit carryforwards will begin expiring in 2033 unless previously utilized. The California
research and development tax credit carryforwards are available indefinitely until utilized.

Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an ownership change (generally defined as a greater than 50% change (by value) in its equity
ownership over a three year period), the corporations ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. Similar rules may apply under state tax
laws. We have not performed a detailed analysis to determine whether an ownership change under Section 382 of the Code, or similar state provisions, has previously occurred or will occur as a result of this offering. As a result, if we earn net
taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S. federal taxable income may become subject to limitations, which could potentially result in increased future tax liability to us.

Risks Related to Our Common Stock and this Offering

An active trading market for our common stock may not
develop.

Prior to this offering,
there has been no public market for our common stock. We cannot assure you that an active trading market for our shares will develop or be sustained following this offering. If the market does not develop or is not sustained, it may be difficult for
you to sell your shares of common stock at a price that is attractive to you or at all. In addition, an inactive market may impair our ability to raise capital by selling shares and may impair our ability to acquire other companies or technologies
by using our shares as consideration, which, in turn, could materially adversely affect our business.

The trading price of the shares of our common stock could be highly volatile, and purchasers of our common stock could incur
substantial losses.

Our stock price is
likely to be volatile. The stock market in general and the market for biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this
volatility, investors may not be able to sell their common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors, including:

market conditions in the pharmaceutical and biotechnology sectors and issuance of securities analysts reports or recommendations;



sales of our stock by insiders and stockholders;



trading volume of our common stock;



general economic, industry and market conditions other events or factors, many of which are beyond our control;



additions or departures of key personnel; and



intellectual property, product liability or other litigation against us.

In addition, in the past, stockholders have initiated class action lawsuits against biotechnology and
pharmaceutical companies following periods of volatility in the market prices of these companies stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert managements attention and resources,
which could have a material adverse effect on our business, financial condition and results of operations.

Our quarterly operating results may fluctuate significantly.

We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating
results will be affected by numerous factors, including:



variations in the level of expenses related to our clinical trial and development programs;

our execution of any collaborative, licensing or similar arrangements and the timing of payments we may make or receive under these arrangements; and



nature and terms of stock-based compensation grants and any intellectual property infringement lawsuit in which we may become involved.

If our quarterly operating
results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to
fluctuate substantially.

If securities or
industry analysts do not publish research or reports or publish unfavorable research or reports about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part
on the research and reports that securities or industry analysts publish about us, our business, our market or our competitors. We do not currently have and may never obtain research coverage by securities and industry analysts. If no securities or
industry analysts commence coverage of our company, the trading price for our stock would be negatively impacted. In the event we obtain securities or industry analyst coverage, if one or more of the analysts who covers us downgrades our stock, our
stock price would likely decline. If one or more of these analysts ceases to cover us or fails to regularly publish reports on us, interest in our stock could decrease, which could cause our stock price or trading volume to decline.

We may use the net proceeds from this offering in ways
that you and other stockholders may not approve.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section entitled Use of Proceeds, and
you will not have the opportunity as part of your investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this

offering, their ultimate use may vary substantially from their currently intended use. Our management might not apply our net proceeds in ways that ultimately increase the value of your
investment. We intend to use the net proceeds from this offering to fund the development of CVC for the treatment of NASH, including the Phase 2b CENTAUR clinical trial that we are currently enrolling, and other immuno-inflammatory and fibrosis
indications, as well as for manufacturing of clinical drug supply, working capital and general corporate purposes. We do not intend to use the net proceeds from this offering for our Phase 3 program for HIV-1 because we intend to advance this
program through a strategic collaboration or non-dilutive financing. The failure by our management to apply the net proceeds from this offering effectively could harm our business. Pending their use, we may invest the net proceeds from this offering
in short- and intermediate-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government. These investments may not yield a favorable return to our stockholders.

You will suffer immediate and
substantial dilution in the net tangible book value of the common stock you purchase.

The initial public offering price of our common stock is substantially higher than the pro forma as adjusted net tangible book value per share of our outstanding common stock immediately after the
completion of this offering. Purchasers of common stock in this offering will experience immediate dilution of approximately $ per share, assuming an initial public offering price of
$ per share, the midpoint of the range set forth on the cover of this prospectus. In the past, we issued options and warrants to acquire common stock at prices significantly below the initial
public offering price. To the extent these outstanding options and warrants are ultimately exercised, investors purchasing common stock in this offering will sustain further dilution. For a further description of the dilution that you will
experience immediately after this offering, see Dilution.

Sales of a substantial number of shares of our common stock by our existing stockholders in the public market could cause our stock price to fall.

Sales of a substantial number of shares of our common stock
in the public market or the perception that these sales might occur, could significantly reduce the market price of our common stock and impair our ability to raise adequate capital through the sale of additional equity securities.

Upon the closing of this offering, we will have
outstanding a total of shares of common stock after this offering, assuming no exercise of the underwriters option to purchase additional shares
and no exercise of options and warrants outstanding immediately following the consummation of this offering. Of these shares, the shares of common
stock sold in this offering by us, plus any shares sold upon exercise of the underwriters option to purchase additional shares, will be freely tradable without restriction in the public market immediately following this offering, unless they
are purchased by one of our affiliates.

We and
our executive officers, directors and stockholders have agreed, subject to certain exceptions, not to engage in sales or dispositions of, or other transactions relating to, our common stock or securities convertible into or exercisable or
exchangeable for our common stock or warrants or other rights to acquire shares of our common stock. These lock-up restrictions end 180 days after the date of this prospectus. However, Oppenheimer & Co. Inc. may permit persons who
are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements.

After the lock-up agreements expire, up to an additional
shares of common stock will be eligible for sale in the public market of which
shares are held by directors, executive officers and other affiliates and will be subject to volume limitations under Rule 144 under the Securities Act
of 1933, as amended, or the Securities Act. In addition, shares of common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans will become eligible for sale in the public market to the
extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the
public market, the trading price of our common stock could decline.

Certain holders of shares of our common stock will be entitled to rights with respect to the
registration of their shares under the Securities Act, subject to the 180-day lock-up agreements described above. See Description of Capital StockRegistration Rights. Registration of these shares under the Securities Act would
result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by affiliates, as defined in Rule 144 under the Securities Act. Any sales of securities by these stockholders could have a material
adverse effect on the trading price of our common stock.

Future sales and issuances of our common stock or rights to purchase common stock pursuant to our equity incentive plans could result in additional dilution of the percentage ownership of our
stockholders and could cause our share price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing equity securities, our stockholders may
experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or
other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing
stockholders.

As of June 30, 2014, we had an
aggregate of 965,988 options outstanding under our 2010 Stock Plan and 2007 Stock Plan, an aggregate of 199,582 shares of common stock reserved for future grants under our 2010 Stock Plan and 2007 Stock Plan and 1,500,000 shares of common stock
reserved for future grants under our 2014 Equity Incentive Plan. We plan to register the number of shares issuable upon outstanding awards and available for future grants under our 2010 Stock Plan and our 2007 Stock Plan as well as the number of
shares issuable upon outstanding awards and available for issuance under our 2014 Equity Incentive Plan. Sales of shares granted under our equity incentive plans or upon exercise of warrants may result in material dilution to our existing
stockholders, which could cause our share price to fall.

We do not intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common stock.

We have never declared or paid any cash
dividend on our common stock and do not currently intend to do so for the foreseeable future. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business. In addition, our term loan with
Oxford currently prohibits us from paying dividends on our equity securities, and any future debt financing arrangement may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock. Any return to
stockholders will therefore be limited to the appreciation of their stock. Therefore, the success of an investment in shares of our common stock will depend upon any future appreciation in their value. There is no guarantee that shares of our common
stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares.

We will incur significant increased costs as a result of operating as a public company, and our management will be required to
devote substantial time to new compliance initiatives.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. We will be subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended, or the Exchange Act, which will require, among other things, that we file with the Securities and Exchange Commission, or the SEC, annual, quarterly and current reports with respect to our business and financial condition.
In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC, and The NASDAQ Global Market to implement provisions of the Sarbanes-Oxley Act, imposes significant requirements on public companies, including requiring
establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, pursuant to the Dodd-Frank Wall

Street Reform and Consumer Protection Act of 2010, the SEC has adopted additional rules and regulations in these areas, such as mandatory say on pay voting requirements that will
apply to us when we cease to be an emerging growth company. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure
obligations, which may lead to additional compliance costs and may impact the manner in which we operate our business in ways we cannot currently anticipate.

We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and
to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and
results of operations. The increased costs will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. For example, we expect these
rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate
the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board
committees or as executive officers.

We are
an emerging growth company, and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an emerging growth company, as defined in the
Jumpstart Our Business Startups Act of 2012, or the JOBS Act and are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies,
including, but not limited to, only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced Managements Discussion and Analysis of Financial Condition and
Results of Operations disclosure, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in this prospectus and our periodic reports and proxy statements, exemptions from the requirements of holding non-binding advisory votes on executive compensation and seeking stockholder approval of any golden parachute payments not
previously approved and not being required to adopt certain accounting standards until those standards would otherwise apply to private companies. We could be an emerging growth company until the last day of the fiscal year following the fifth
anniversary of this offering, although circumstances could cause us to lose that status earlier, including if we become a large accelerated filer (in which case we will cease to be an emerging company as of the date we become a large accelerated
filer, which, generally, would occur if, at the end of a fiscal year, among other things, the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second
fiscal quarter), if we have total annual gross revenue of $1.0 billion or more during any fiscal year (in which cases we would no longer be an emerging growth company as of December 31 of such fiscal year), or if we issue more than $1.0 billion
in non-convertible debt during any three year period before that time (in which case we would cease to be an emerging growth company immediately). Even after we no longer qualify as an emerging growth company, we may still qualify as a smaller
reporting company, which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act and reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these
exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

If we fail to maintain proper and effective internal control over financial reporting
in the future, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors views of us and, as a result, the value of our common stock.

Pursuant to Section 404 of the Sarbanes-Oxley Act, our
management will be required to report upon the effectiveness of our internal control over financial reporting beginning with the annual report for our fiscal year ending December 31, 2015. When and if we are a large accelerated
filer or an accelerated filer and are no longer an emerging growth company, each as defined in the Exchange Act, our independent registered public accounting firm will be required to attest to the effectiveness of our
internal control over financial reporting. However, for so long as we remain an emerging growth company, we intend to take advantage of an exemption available to emerging growth companies from these auditor attestation requirements. The rules
governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation. To comply with the requirements of being a
reporting company under the Exchange Act, we will need to upgrade our systems including information technology; implement additional financial and management controls, reporting systems, and procedures; and hire additional accounting and finance
staff. If we or, if required, our auditors are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in our financial reporting, and the trading price of our common stock may decline.

Because a small number of our existing
stockholders own a majority of our voting stock, your ability to influence corporate matters will be limited.

Following the completion of this offering, our executive officers, directors and greater than 5% stockholders, in the aggregate, will own
approximately % of our outstanding common stock. As a result, such persons, acting together, will have the ability to control our management and affairs and substantially all matters submitted to our
stockholders for approval, including the election and removal of directors and approval of any significant transaction. These persons will also have the ability to control our management and business affairs. This concentration of ownership may have
the effect of delaying, deferring or preventing a change in control, impeding a merger, consolidation, takeover or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to
obtain control of our business, even if such a transaction would benefit other stockholders. In addition, all of our existing principal investors have indicated an interest in purchasing an aggregate of approximately
$ million to $ million of shares of our common stock in this offering at the initial public offering price. The above ownership percentage following the
completion of this offering does not reflect the potential purchase of any shares in this offering by such entities.

NASDAQ may delist our securities from its exchange, which could limit investors ability to make transactions in our securities
and subject us to additional trading restrictions.

Our common stock has been approved for listing on the NASDAQ Global Market. In order to make a final determination of compliance with their listing criteria, NASDAQ may look to the first trading
days activity and, particularly, the last bid price on such day. In the event the trading price for our common stock drops below the NASDAQ Global Markets $4.00 minimum bid requirement, NASDAQ could rescind our initial listing approval.
If that were to happen, the liquidity for our common stock would decrease. If we failed to list the stock on the NASDAQ Global Market, the liquidity for our common stock would be significantly impaired, which may substantially decrease the trading
price of our common stock.

In addition, we cannot
assure you that, in the future, our securities will meet the continued listing requirements to be listed on NASDAQ. If NASDAQ delists our common stock from trading on its exchange, we could face significant material adverse consequences, including:



a limited availability of market quotations for our securities;



a determination that our common stock is a penny stock which will require brokers trading in our common stock to adhere to more stringent
rules and possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock;

a decreased ability to issue additional securities or obtain additional financing in the future.

Anti-takeover provisions in our charter documents and
under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our amended and restated certificate of
incorporation and amended and restated bylaws that will be in effect upon completion of this offering may delay or prevent an acquisition of us or a change in our management. These provisions include:



authorizing the issuance of blank check preferred stock, the terms of which may be established and shares of which may be issued without
stockholder approval;



limiting the removal of directors by the stockholders;



creating a staggered board of directors;



prohibiting stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders;



eliminating the ability of stockholders to call a special meeting of stockholders;



permitting our board of directors to accelerate the vesting of outstanding option grants upon certain transactions that result in a change of control;
and



establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at
stockholder meetings.

In
addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to
merge or combine with us. Although we believe these provisions collectively provide for an opportunity to obtain greater value for stockholders by requiring potential acquirors to negotiate with our board of directors, they would apply even if an
offer rejected by our board were considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for
stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

This prospectus includes forward-looking statements. All
statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are
forward-looking statements. The words believe, may, will, estimate, continue, anticipate, design, intend, expect, could,
plan, potential, predict, seek, should, would or the negative version of these words and similar expressions are intended to identify forward-looking statements. We have based
these forward-looking statements on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short- and long-term business operations and objectives,
and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, including those described in Risk Factors. In light of these risks, uncertainties,
assumptions and other factors, the forward-looking events and circumstances discussed in this prospectus may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Forward-looking statements include, but are not limited to, statements about:



the timing and success of preclinical studies and clinical trials conducted by us and our development partners;



the ability to obtain and maintain regulatory approval of our product candidates, and the labeling for any approved products;



the scope, progress, expansion, and costs of developing and commercializing CVC or other future product candidates;



the size and growth of the potential markets for CVC or other future product candidates and the ability to serve those markets;

the anticipated trends and challenges in our business and the market in which we operate; and



our use of proceeds from this offering.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
level of activity, performance or achievements. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Any forward-looking statement made by us in this
prospectus speaks only as of the date on which it is made. Except as required by law, we disclaim any duty to update any of these forward-looking statements after the date of this prospectus publicly, or to update the reasons actual results could
differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

You should rely only on the information contained in this prospectus and any free writing
prospectus prepared by us or on our behalf or to which we have referred you. You should read this prospectus and any such free writing prospectus and the documents that we reference in this prospectus and have filed with the Securities and Exchange
Commission as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking
statements by these cautionary statements.

We obtained the industry, market and competitive position
data used throughout this registration statement from our own internal estimates and research, as well as from industry and general publications, in addition to research, surveys and studies conducted by third parties. Internal estimates are derived
from publicly available information released by industry analysts and third-party sources, our internal research and our industry experience, and are based on assumptions made by us based on such data and our knowledge of our industry and market,
which we believe to be reasonable. In addition, while we believe the industry, market and competitive position data included in this prospectus is reliable and is based on reasonable assumptions, such data involves risks and uncertainties and are
subject to change based on various factors, including those discussed in Risk Factors. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

We estimate that the net proceeds from the sale of
shares of our common stock in this offering will be approximately
$ million, based on an assumed initial public offering price of $ per share, the midpoint of the
price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters option to purchase additional shares from
us is exercised in full, we estimate that our net proceeds will be approximately $ million. A $1.00 increase (decrease) in the assumed initial public offering price of
$ per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the estimated net proceeds to us by approximately
$ million, assuming that the number of shares offered by us as set forth on the cover page of this prospectus remains the same and after deducting the estimated underwriting
discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1.0 million in the number of shares offered by us would increase
(decrease) the net proceeds to us by approximately $ million, assuming an initial public offering price of
$ per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and
estimated offering expenses payable by us.

We are
undertaking this offering in order to access the public capital markets and increase our liquidity. We intend to use the net proceeds from this offering to fund the further development and commercialization of CVC for the treatment of NASH,
including our Phase 2b CENTAUR trial currently enrolling patients, and other immuno-inflammatory and fibrosis indications, as well as for manufacturing of clinical drug supply, working capital and general corporate purposes. We estimate that the
proceeds from this offering, together with our current resources, can fund operations through the primary endpoint of the CENTAUR study. Although we cannot specify with certainty the particular amounts or uses for the net proceeds from this
offering, we currently intend to use approximately:



$ million for the development of CVC for the treatment of NASH including
our Phase 2b clinical trial of CVC for the treatment of NASH,



$ million for other immuno-inflammatory and fibrosis indications,



$ million for manufacturing of clinical drug supply, and



the remainder for working capital and general corporate purposes.

Accordingly, our management will have broad discretion in using the net proceeds from this offering. We will
require substantial future capital in order to complete the remaining clinical development for CVC and our other product candidates and to potentially commercialize these products. We do not intend to use the net proceeds from this offering for our
Phase 3 program for HIV-1 because we intend to advance this program only through a strategic collaboration or non-dilutive financing.

Pending the use of proceeds from this offering as described above, we plan to invest the net proceeds in short- and intermediate-term,
interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

We have never declared or paid any cash dividend on our
capital stock. We currently intend to retain all available funds and any future earnings to support our operations and finance the growth and development of our business. We do not expect to pay any dividends in the foreseeable future. In addition,
unless amended, the terms of our term loan with Oxford do not allow us to pay cash dividends. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend on, among other factors, our financial
condition, operating results, capital requirements, general business conditions, contractual restrictions and other factors that our board of directors may deem relevant.

The following table sets forth our cash and cash
equivalents and our capitalization as of June 30, 2014, as follows:

The preceding table presents a summary of our balance sheet data as of June 30, 2014:



on an actual basis;



on a pro forma basis to give effect to (i) the Transactions immediately prior to the completion of this offering and (ii) the conversion of
our outstanding convertible preferred stock warrants issued in connection with our term loans with Square 1 Bank and Oxford into warrants to purchase 44,482 shares of common stock.



on a pro forma as adjusted basis to give further effect to the issuance and sale of
shares of our common stock by us and the receipt of the estimated net proceeds from such sale, assuming an initial public offering price of
$ per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and
estimated expenses payable by us.

You should read this table in conjunction with Selected Financial Data and Managements Discussion and Analysis of Financial Condition and Results of Operations and our
financial statements and related notes included elsewhere in this prospectus.

The pro forma as adjusted information below is illustrative only and our cash and cash
equivalents and capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed initial
public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of cash and cash
equivalents, additional paid-in capital, total stockholders deficit and total capitalization by $ million, assuming that the number of shares offered by us, as set forth
on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1.0 million in the number of shares
offered by us would increase (decrease) cash and cash equivalents, additional paid-in capital, total stockholders deficit and total capitalization by approximately $
million, assuming an initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the
estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will be adjusted based on the actual public offering price and other terms
of this offering determined at pricing.

The
table above excludes the following shares:



965,988 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2014, with a weighted-average exercise price of $6.17
per share;

1,500,000 shares of common stock reserved for future grants under our 2014 Equity Incentive Plan, which became effective in May 2014 (subject to
automatic annual adjustment in accordance with the terms of the plan), of which options to purchase 162,685 shares of common stock at an exercise price equal to the initial public offering price set forth on the cover of this prospectus will be
granted coincident with this offering, of which 94,158 shares will be awarded to executive officers;



44,482 shares of common stock issuable upon the exercise of warrants issued to our term loan lenders at an exercise price of $14.50 per share.

Because the share amounts
set forth above are based on shares of preferred stock and convertible notes outstanding as of June 30, 2014, such amounts do not take into account shares of common stock to be issued in satisfaction of accrued and unpaid interest on the convertible
notes accrued after June 30, 2014 and through the closing date of this offering. Such interest accrues at a rate of approximately $0.2 million per month in the aggregate.

If you invest in our common stock in this offering, you will
experience dilution to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

Historical net tangible book value per share
is determined by subtracting our total liabilities from our total tangible assets, and dividing the result by the number of shares of common stock outstanding. Our historical net tangible book deficit as of June 30, 2014, was $96.7 million, or
$(342.84) per share of common stock. On a pro forma basis, after giving effect to (i) the Transactions immediately prior to the completion of this offering, assuming an initial public offering price of
$ per share, the mid point of the price range set forth on the cover page of this prospectus, our pro forma net tangible book
deficit as of June 30, 2014, would have been $ million, or
$ per share.

After giving further effect to the issuance and sale of
shares of our common stock by us and the receipt of the estimated net proceeds from such sale, assuming an initial public
offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, and after
deducting the estimated underwriting discounts and commissions and estimated expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2014 would have been
$ million, or
$ per share. This represents an immediate increase in pro forma net tangible book value of
$ per share to existing stockholders and an immediate dilution of
$ per share to purchasers of common stock in this offering, as illustrated in the following table:

Assumed initial public offering price per share

$

Historical net tangible book deficit per share as of June 30, 2014

$

342.84

Pro forma increase in net tangible book value per share as of June 30, 2014 attributable to the pro forma transactions
described in the second paragraph above

Pro forma net tangible book value per share as of June 30, 2014

Increase in pro forma net tangible book value per share attributable to new investors in this offering

Pro forma as adjusted net tangible book value per share immediately after this offering

Dilution per share to new investors in this offering

$

If the
underwriters over-allotment option to purchase additional shares is exercised in full, the pro forma as adjusted net tangible book value per share after this offering would be
$ per share, the increase in pro forma as adjusted net tangible book value per share to existing stockholders would be
$ per share and the dilution to new investors purchasing shares in this offering would be
$ per share.

The following table presents, on a pro forma as adjusted basis as of June 30, 2014,
the differences between existing stockholders and purchasers of shares in this offering with respect to the number of shares purchased from us, the total consideration paid or to be paid and the average price paid per share, assuming, with respect
to the purchasers of shares in this offering (assuming no participation by our existing principal investors), an initial public offering price of
$ per share, the midpoint of the price range on the cover of this prospectus and before deducting estimated underwriting
discounts and commissions and estimated expenses payable by us:

Shares Purchased

Total Consideration

AveragePrice
perShare

Number

Percent

Amount

Percent

Existing stockholders before this offering

%

$

%

$

Investors participating in this offering

Total

100

%

$

100

%

The table above is
based on 7,011,018 shares outstanding as of June 30, 2014 after giving effect to the pro forma adjustments described above and excludes:



965,988 shares of common stock issuable upon the exercise of options outstanding as of June 30, 2014, with a weighted-average exercise price of
$6.17 per share;

1,500,000 shares of common stock reserved for future grants under our 2014 Equity Incentive Plan, which became effective in May 2014 (subject to
automatic annual adjustment in accordance with the terms of the plan), of which options to purchase 162,685 shares of common stock at an exercise price equal to the initial public offering price set forth on the cover of this prospectus will be
granted coincident with this offering, of which 94,158 shares will be awarded to executive officers; and



44,482 shares of common stock issuable upon the exercise of warrants issued to our term loan lenders at an exercise price of $14.50 per share.

Because the share amounts
set forth above are based on shares of preferred stock and convertible notes outstanding as of June 30, 2014, such amounts do not take into account shares of common stock to be issued in satisfaction of accrued and unpaid interest on the
convertible notes accrued after June 30, 2014 and through the closing date of this offering. Such interest accrues at a rate of approximately $0.2 million per month in the aggregate.

To the extent that any outstanding options or warrants are exercised or new options are issued under our
incentive plans, there will be further dilution to investors participating in this offering.

We are a development stage company. The following tables
set forth selected financial data. The selected financial data included in this section are not intended to replace the financial statements and the related notes included elsewhere in this prospectus. The selected statement of operations data for
the years ended December 31, 2012 and 2013 and the selected balance sheet data as of December 31, 2012 and 2013 were derived from our audited financial statements appearing elsewhere in this prospectus. The selected statement of operations
data for the six months ended June 30, 2013 and 2014 and the period from September 11, 2006 (inception) to June 30, 2014 and the selected balance sheet data as of June 30, 2014 were derived from our unaudited financial statements
appearing elsewhere in this prospectus. The unaudited financial statements have been prepared on a basis consistent with our audited financial statements included in this prospectus and include, in our opinion, all adjustments, consisting only of
normal recurring adjustments, necessary for the fair presentation of the financial information in those statements. You should read this selected financial data in conjunction with the section titled Managements Discussion and Analysis
of Financial Condition and Results of Operations and our financial statements and related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of our results for any future period and results of
interim periods are not necessarily indicative of the results for the entire year.

See Note 2 to our financial statements appearing elsewhere in this prospectus for an explanation of the calculation of basic and diluted net loss per common share and
the number of shares used in the computation of the per share amounts.

The following discussion and analysis should be read in
conjunction with Selected Financial Data and our financial statements and related notes included elsewhere in this prospectus. This discussion and analysis and other parts of this prospectus contain forward-looking statements based upon
current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and the timing of selected events could
differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth under Risk Factors and elsewhere in this prospectus. You should carefully read the Risk
Factors section of this prospectus to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled Special Note Regarding
Forward-Looking Statements.

Overview

We are a clinical-stage biopharmaceutical company
focused on the development and commercialization of innovative therapeutics to treat liver disease, human immunodeficiency virus, or HIV, fibrosis and inflammation. Our lead product candidate, cenicriviroc, or CVC, is a proprietary immunomodulator
that can potentially be used to treat a number of disease states with high unmet medical need. We are developing CVC for nonalcoholic steatohepatitis, or NASH, for which we are enrolling a Phase 2b clinical trial. CVC is a once-daily pill with
well-established safety and tolerability in approximately 580 subjects dosed in completed Phase 1 and Phase 2 trials, including a pharmacokinetics (PK) and safety study in subjects with liver cirrhosis and 115 HIV type 1, or
HIV-1, infected subjects on treatment for up to 48 weeks. We also plan to advance CVC in a fixed-dose combination for HIV-1 infection through Phase 3
development and commercialization in collaboration with a strategic partner or with non-dilutive financing.

We have no products approved for commercial sale and have not generated any revenues from product sales since our inception in 2006. From
inception to June 30, 2014, we have raised net cash proceeds of approximately $91.9 million to fund operations, primarily from private placements of convertible preferred stock, convertible notes and warrants. In addition, we have borrowed
$19.0 million under term loans with Square 1 Bank and Oxford Finance LLC, or Oxford, of which $4.0 million has been repaid to Square 1 Bank to fully pay off that loan and we plan to use the balance for working capital.

We have never been profitable and have incurred significant
operating losses in each year since our inception. Our net losses for the years ended December 31, 2012 and 2013 and for the six months ended June 30, 2013 and 2014 were $18.8 million, $18.6 million, $11.7 million and $10.7 million,
respectively. As of June 30, 2014, we had a deficit accumulated during the development stage of $100.4 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs
and from general and administrative costs associated with our operations. We expect to continue to incur significant expenses and increasing operating losses for at least the next several years as we continue the clinical development of, and seek
regulatory approval for our drug candidates. Our operating losses may fluctuate significantly from quarter to quarter and year to year.

To fund future operations, we will need to raise additional capital. The expected net proceeds from this offering, together with our
existing cash and cash equivalents will not be sufficient for us to complete development of our product candidates or, if applicable, to prepare for commercializing any product candidate which may receive approval. In addition, we plan to initiate a
Phase 3 HIV clinical program if we are able to enter into a strategic collaboration or secure non-dilutive financing. Accordingly, we will continue to require substantial additional capital beyond the expected proceeds from this offering to continue
our clinical development and potential commercialization activities. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts. As of June 30, 2014, we
had cash and cash equivalents of $18.8 million. We may seek to obtain additional financing

in the future through the issuance of our common stock, through other equity or debt financings, through collaborations or partnerships with other companies or through non-dilutive financing. We
may not be able to raise additional capital on terms acceptable to us, or at all, and any failure to raise capital as and when needed will likely have a negative impact on our financial condition and our ability to execute on our business plan. We
believe that the net proceeds from this offering and our existing cash and cash equivalents will be sufficient to fund our operations through at least the second quarter of 2016.

Basis of Presentation

Research and Development Expenses

Research and development expenses primarily consist of costs associated with our research activities, including the preclinical and
clinical development of our product candidates. We expense research and development expenses as incurred. We contract with clinical research organizations to manage our clinical trials under agreed upon budgets for each study, with oversight by our
clinical program managers. We account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received.
Manufacturing expense includes costs associated with drug formulation development and clinical drug production. We do not track our employee and facility related research and development costs by project, as we typically use our employee and
infrastructure resources across multiple research and development programs. We believe that the allocation of such costs would be arbitrary and would not be meaningful. Our research and development costs are controlled through our internal budget
and forecast process.

Our research and
development expenses consist primarily of:



salaries and related expenses for employee personnel, including benefits, travel and expenses related to stock-based compensation granted to personnel
in development functions;

expenses related to drug formulation development and the production of nonclinical and clinical trial supplies, including fees paid to contract
manufacturers;



expenses related to preclinical studies;



expenses related to compliance with drug development regulatory requirements; and



other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of equipment, and other
supplies.

We expect to
continue to incur substantial expenses related to our development activities for the foreseeable future as we conduct our Phase 2b clinical trial of CVC in NASH for a study entitled Cenicriviroc Efficacy and Safety Study in Adult Subjects
with Nonalcoholic Steatohepatitis and Liver Fibrosis, which we refer to as CENTAUR. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development,
primarily due to the increased size and duration of later-stage clinical trials. Although our research and development expenses decreased in 2013 and in the six months ended June 30, 2014 due to the completion of our Phase 2b HIV study, we
expect that our research and development expenses will increase substantially in the future. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming. The probability of
success for each product candidate is affected by numerous factors, including preclinical data, clinical data, competition, manufacturing capability and commercial viability. Accordingly, we may never succeed in achieving marketing approval for any
of our product candidates.

Successful
development of current and future product candidates is highly uncertain. Completion dates and costs for our clinical development programs as well as our research program can vary significantly for each current and future product candidate and are
difficult to predict. As a result, we cannot estimate with any degree

of certainty the costs we will incur in connection with development of our product candidates. We anticipate we will make determinations as to which programs and product candidates to pursue and
how much funding to direct to each program and product candidate on an ongoing basis in response to the scientific success of early research programs, results of ongoing and future clinical trials, our ability to enter into collaborative agreements
with respect to programs or potential product candidates, as well as ongoing assessments as to each current or future product candidates commercial potential.

Research and development expenses by major programs or
categories were as follows (in thousands):

General and administrative
expenses consist primarily of salaries, benefits and stock-based compensation expense for employees in executive, finance, business development and support functions. Other significant general and administrative expenses include the costs associated
with obtaining and maintaining our patent portfolio, professional fees for accounting, auditing, consulting and legal services, travel and allocated overhead expenses.

We expect that our general and administrative expenses will
increase in the future as we expand our operating activities, increase headcount and maintain and expand our patent portfolio, as well as incur additional costs associated with being a publicly traded company and maintaining compliance with exchange
listing and Securities and Exchange Commission requirements. These increases will likely include legal fees, accounting fees, directors and officers liability insurance premiums and fees associated with investor relations.

Other Income (Expense), Net

Other income (expense), net consists primarily of cash
interest expense on our term loans with Square 1 Bank and Oxford and non-cash interest expense and amortization of debt issuance and debt discount costs related to our convertible notes. Concurrently with the issuance of the convertible notes and
associated warrants, we recorded a beneficial conversion feature equal to the difference between the conversion price and the fair value of the underlying preferred stock into which the convertible notes may be converted. The intrinsic value of this
beneficial conversion feature is recorded as a debt discount and is amortized over the debt borrowing term.

In connection with the sale of our Series B convertible preferred stock, we provided stockholders with the right to obligate us to sell
additional shares in a second closing contingent upon certain events. This tranche right was recorded on the date of issuance at its estimated fair value and was remeasured at each reporting period with increases or reductions in fair value recorded
in other income (expenses), net. Upon completion of the second closing of the Series B preferred stock financing in 2011, the tranche preferred stock liability was reclassified to Series B preferred stock.

We have incurred net losses and have not recorded any U.S. federal or state income tax benefits for the losses
as they have been offset by valuation allowances.

As of December 31, 2013, we had federal and state tax net operating loss carryforwards of approximately $75.3 million and
$28.8 million, respectively, which begin to expire in 2023 for federal and 2015 for state unless previously utilized. As of December 31, 2013, we had federal and California research and development tax credit carryforwards of approximately
$0.7 million and $0.2 million, respectively. The federal research and development tax credit carryforwards will begin expiring in 2033 unless previously utilized. The California research and development tax credit carryforwards are
available indefinitely until utilized.

We expect
the future utilization of net operating loss and tax credit carryforwards to be limited due to changes in ownership. In general, if we experience a greater than 50% aggregate change in ownership of certain significant stockholders or groups over a
three-year period, or a Section 382 ownership change, utilization of our pre-change net operating loss carryforwards would be subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended, and similar
state laws. The annual limitation generally is determined by multiplying the value of our stock at the time of such ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate. Such limitations may result in
expiration of a portion of our operating loss carryforwards before we can use them and may be substantial. We have recorded a valuation allowance on all of our deferred tax assets, including our deferred tax assets related to our net operating loss
and research and development tax credit carryforwards.

Critical Accounting Policies and Significant Judgments and Estimates

Our managements discussion and analysis of our
financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements. On an ongoing basis, we evaluate our estimates and
judgments, including those related to accrued research and development expenses, warrant liabilities and stock-based compensation expense. We base our estimates on historical experience, known trends and events, and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially
from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our financial statements appearing elsewhere in this prospectus, we believe the following accounting policies are the
most critical for fully understanding and evaluating our financial condition and results of operations.

Accrued Research and Development Expenses

We make estimates of our accrued research and development
expenses as of each balance sheet date in our financial statements based on the facts and circumstances known to us at that time. Our expense accruals for clinical trial activities performed by third parties are based upon estimates of the
proportion of work completed over the life of the individual clinical trial and patient enrollment rates in accordance with agreements established with CROs and clinical trial sites. We determine the estimates by reviewing contracts, vendor
agreements and purchase orders, and through discussions with internal clinical personnel and external service providers as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services. If
possible, we obtain information regarding unbilled services directly from these service providers. However, we may be required to estimate these services based on other information available to us.

If the actual timing of the performance of services or the level of effort varies from the
estimate, we will adjust the accrual accordingly. If we underestimate or overestimate the activity or fees associated with a study or service at a given point in time, adjustments to research and development expenses may be necessary in future
periods. Historically, our estimated accrued liabilities have approximated actual expense incurred. Subsequent changes in estimates may result in a material change in our accruals. Nonrefundable advance payments for goods and services, including
fees for process development or manufacturing and distribution of clinical supplies that will be used in future research and development activities, are deferred and recognized as expense in the period that the related goods are consumed or services
are performed.

Estimated Fair Value of
Preferred Stock Warrants

We have issued
freestanding warrants to purchase shares of our convertible preferred stock. The fair value of these warrants is recorded as a liability on our balance sheet at issuance and remeasured at each reporting period. The warrants are recorded at fair
value using an option pricing model. At the end of each reporting period, changes in estimated fair value during the period are recorded as a component of other income (expense), net. We will continue to re-measure the fair value of these
liabilities until the earlier of the expiration of the warrants, exercise of the warrants, or conversion of the preferred stock underlying the warrants into common stock upon the completion of a liquidity event, including an initial public offering,
at which time the liabilities will be reclassified to additional paid-in capital. All outstanding preferred stock warrants issued in connection with our convertible debt financings will become exercisable prior to the consummation of this offering.

Stock-based Compensation Expense

Stock-based compensation expense is
measured at the date of grant, based on the estimated fair value of the award using the Black-Scholes option pricing model. For awards subject to time-based vesting conditions, we recognize stock-based compensation expense over the employees
requisite service period on a straight-line basis, net of estimated forfeitures. We account for stock-based compensation arrangements with non-employees using a fair value approach. Stock options granted to non-employees are subject to periodic
revaluation over their vesting terms.

The
Black-Scholes option pricing model requires the input of highly subjective assumptions, including (a) the risk-free interest rate, (b) the expected volatility of our stock, (c) the expected term of the award and (d) the expected
dividend yield. Due to the lack of a public market for the trading of our common stock and a lack of company specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group
of similar companies whose shares are publicly traded. For these analyses, we have selected biopharmaceutical companies with comparable characteristics to ours including the stage of development of their product candidates, risk profiles, position
within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. We compute the historical volatility data using the daily closing prices for the selected companies shares during
the equivalent period of the calculated expected term of our stock-based awards. We have estimated the expected term of our employee stock options using the simplified method, whereby the expected life equals the average of the vesting
term and the original contractual term of the option. The risk-free interest rates for periods within the expected life of the option are based on the yields of zero-coupon U.S. Treasury securities with maturities similar to those of the expected
term of the award being valued. We estimate forfeitures based on an analysis of our historical forfeitures.

See Note 9 to Notes to Financial Statements included elsewhere in this prospectus for information concerning certain specific
assumptions used in applying the Black-Scholes option-pricing model to determine the estimated fair value of stock options granted in 2012 and 2013 and for the six months ended June 30, 2013 and 2014. In addition to the assumptions used in the
Black-Scholes option-pricing model, we must also estimate a forfeiture rate to calculate the stock-based compensation expense for our awards. We will continue to use judgment in evaluating the expected volatility, expected terms, and forfeiture
rates utilized for our stock-based compensation expense calculations on a prospective basis.

We are required to estimate the fair value of the common
stock underlying our stock-based awards when performing fair value calculations. The fair value of the common stock underlying our stock-based awards was determined on each grant date by our board of directors, with input from management and
independent third-party valuation analysis. All options to purchase shares of our common stock are intended to be granted with an exercise price per share no less than the fair value per share of our common stock underlying those options on the date
of grant, based on the information known to us on the date of grant. In the absence of a public trading market for our common stock, on each grant date we develop an estimate of the fair value of our common stock in order to determine an exercise
price for the option grants. Our determinations of the fair value of our common stock were made using methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Audit and Accounting Practice Aid
Series: Valuation of Privately Held Company Equity Securities Issued as Compensation, or the Practice Aid.

In addition, our board of directors also considered various objective and subjective factors, along with input from management, to
determine the fair value of our common stock, including:

the prices of our convertible preferred stock sold to investors in arms length transactions and the rights, preferences and privileges of our
convertible preferred stock as compared to those of our common stock, including the liquidation preferences of our convertible preferred stock;



our results of operations, financial position and the status of research and development efforts and achievement of enterprise milestones;



the composition of, and changes to, our management team and board of directors;



the lack of liquidity of our common stock as a private company;



our stage of development, business strategy and the material risks related to our business and industry;



the valuation of publicly-traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of
peer companies;

the likelihood of achieving a liquidity event for the holders of our common stock, such as an initial public offering, or IPO, or a sale of our
company, given prevailing market conditions; and



the state of the IPO market for similarly situated privately held biotechnology companies.

Our assessment analyses were based on a methodology that
first estimated the fair value of our business as a whole, or enterprise value. Once we determined the expected enterprise value, we then adjusted for expected cash and debt balances, allocated value to the various stockholders, adjusted to present
value and discounted for lack of marketability taking into account the fact that our stockholders cannot freely trade our common stock in the public markets.

There are significant judgments and estimates inherent in the determination of the fair value of our common stock. These judgments and
estimates include the selection of the appropriate valuation model, assumptions regarding our future operating performance and financial forecasts utilized to determine future cash balances and necessary capital requirements, the probability and
timing of the various possible liquidity events, the estimated weighted average cost of capital and the discount for lack of marketability of our common stock. If we had made different assumptions, our stock-based compensation expense, net loss and
net loss per common share could have been significantly different.

Our valuations were prepared in accordance with applicable
elements of the Practice Aid, which prescribes several valuation approaches for setting the value of an enterprise, such as the cost, income and market approaches, and various methodologies for allocating the value of an enterprise to its common
stock. The cost approach establishes the value of an enterprise based on the cost of reproducing or replacing the property less depreciation and functional or economic obsolescence, if present. The income approach establishes the value of an
enterprise based on the present value of future cash flows that are reasonably reflective of our companys future operations, discounting to the present value with an appropriate risk-adjusted discount rate or capitalization rate. The market
approach is based on the assumption that the value of an asset is equal to the value of a substitute asset with the same characteristics.

Methods Used to Allocate Our Enterprise Value to Classes of Securities

In accordance with the Practice Aid, we considered the
various methods for allocating the enterprise value across our classes and series of capital stock to determine the fair value of our common stock at each valuation date.

The methods we considered consisted of the following:



Current value method. Under the current value method, once the fair value of the enterprise is established, the value is allocated to the various
series of preferred and common stock based on their respective seniority, liquidation preferences or conversion values, whichever is greatest.



Option pricing method. Under the option pricing method, shares are valued by creating a series of call options with exercise prices based on the
liquidation preferences and conversion terms of each equity class. The values of the preferred and common stock are inferred by analyzing these options.



Probability-weighted expected return method, or PWERM. The PWERM is a scenario-based analysis that estimates the value per share based on the
probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to us, as well as the economic and control rights of each share class.

In valuing our common stock, our board of directors
determined the equity value of our company by utilizing the income and market approaches. The per share common stock value was estimated by allocating the enterprise value using the PWERM at each valuation date during 2012, 2013 and 2014.

The list above is not intended to be a
comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP. There are also areas in which our managements judgment in selecting any available
alternative may produce a materially different result. Please see our audited financial statements and notes thereto included elsewhere in this prospectus, which contain accounting policies and other disclosures required by GAAP.

Emerging Growth Company Status

We are an emerging growth company, as defined in
the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies, including, but not limited to, only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced Managements Discussion and Analysis of
Financial Conditions and Results of Operations disclosure, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy or information statements, exemptions from the requirements of holding a non-binding advisory vote on executive compensation and seeking stockholder approval of any golden parachute
payments not previously approved and not being required to adopt certain accounting standards until those standards would otherwise apply to private companies.

Although we are still evaluating our options under the JOBS Act, we may take advantage of
some or all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an emerging growth company and thus the level of information we provide may be different than that of other public
companies. If we do take advantage of any of these exemptions, some investors may find our securities less attractive, which could result in a less active trading market for our common stock, and our stock price may be more volatile. As an
emerging growth company under the JOBS Act, we are permitted to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. However, we
are electing not to take advantage of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.
Section 107 of the JOBS Act provides that our decision to not take advantage of the extended transition period for complying with new or revised accounting standards is irrevocable.

We could remain an emerging growth company until the earliest to occur of:



the last day of the fiscal year following the fifth anniversary of this offering;



the last day of the fiscal year in which our annual gross revenues exceed $1 billion;



the last day of the fiscal year on which we are deemed to be a large accelerated filer as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our common stock held by non-affiliates exceeded $700 million as of the
last business day of the second fiscal quarter of such fiscal year; or



the date on which we have issued more than $1 billion in non-convertible debt securities during the preceding three-year period.

Results of Operations

Comparison of the Six Months Ended June 30, 2013
and 2014

The following table sets forth
our results of operations for the six months ended June 30, 2013 and 2014 (in thousands):

Six Months EndedJune 30,

Increase/(Decrease)

2013

2014

Research and development expenses

$

8,293

$

4,763

$

(3,530

)

General and administrative expenses

1,398

2,742

1,344

Other income (expense), net

(2,019

)

(2,970

)

951

Research and
Development Expenses. Our research and development expenses were $8.3 million for the six months ended June 30, 2013 compared to $4.8 million for the same period in 2014. The decrease in research and development expenses of $3.5
million in the 2014 period was primarily due to decreases of $2.3 million in clinical trial expenses as we completed our Phase 2b trial in HIV-1 infected patients, $2.0 million in lower spending on drug interaction studies and
bioavailability studies associated with our HIV program, $0.5 million in lower preclinical activities and $0.3 million in reduced manufacturing formulation development activities. These decreases were partially offset by increases of $0.4
million expenses for initiation of our Phase 2b CENTAUR clinical trial, $0.9 million on our Phase 1 study in hepatically impaired patients, and $0.3 million in compensation related expenses in 2014. We expect research and development expenses to
increase over time as we advance our programs for CVC.

General and Administrative Expenses. Our general and administrative expenses were $1.4 million for the six months ended June 30, 2013 compared to $2.7 million for the same period in 2014.
The increase in general and administrative expenses of $1.3 million in the 2014 period resulted from an increase of $1.0 million stock-based compensation expense primarily comprised of $0.8 million due to the change in fair value of a stock award
liability relating to our former chief executive officer as well as $0.1 million related to stock options granted

during the 2014 period, $0.2 million for severance expense related to the termination of employment of our former chief executive officer and $0.1 million in legal expenses associated with patent
filings. We expect general and administrative expenses to increase over time as we advance our programs, increase our headcount and incur expenses of being a public company.

Other Income (Expense), Net. The increase in
other income (expense), net for the six months ended June 30, 2014 compared to the prior year period is primarily due to the increase in the fair value of our preferred stock warrant liability of $0.9 million.

Income Taxes

We have incurred net losses and have not recorded any U.S
federal or state income tax benefits for losses as they have been offset by valuation allowances.

Comparison of the Years Ended December 31, 2012 and 2013

The following table sets forth our results of operations for the years ended December 31, 2012 and 2013 (in thousands):

Year Ended December 31,

Increase/(Decrease)

2012

2013

Research and development expenses

$

13,757

$

12,413

$

(1,344

)

General and administrative expenses

3,250

2,764

(486

)

Other income (expense), net

(1,842

)

(3,412

)

1,570

Research and
Development Expenses. Our research and development expenses were $13.8 million and $12.4 million for the years ended December 31, 2012 and 2013, respectively. The decrease in research and development expense during this period of
$1.3 million was primarily due to decreases of $1.7 million in clinical trials expense, $0.9 million in contract manufacturing expense for drug substance, drug product and clinical trial material, and $0.2 million for outside
development services as we completed our randomized Phase 2b study in HIV-infected patients. The decrease was partially offset by increases of $0.8 million for preclinical studies and $0.6 million for formulation development. We
expect research and development expenses to increase over time as we advance our programs for CVC.

General and Administrative Expenses. General and administrative expenses decreased from $3.3 million for the year ended December 31, 2012 to $2.8 million for the year ended
December 31, 2013. The decrease of $0.5 million was due primarily to a reduction in bonus expense of $0.3 million for 2013 compared to 2012. In addition, in 2012, we incurred $0.2 million of costs associated with the relocation
of our corporate headquarters to California. We expect general and administrative expenses to increase over time as we advance our programs, increase our headcount and incur expenses of being a public company.

Other Income (Expense), Net

Changes in components of other income (expense), net were as
follows:

Interest Expense. Interest
expense increased from $1.9 million for the year ended December 31, 2012 to $3.7 million for the year ended December 31, 2013. In both 2012 and 2013, interest expense included $0.2 million associated with our Square 1 Bank term loan.
The increase in interest expense was primarily due to interest payable and the amortization of debt discount and debt issuance costs associated with the issuance of convertible notes totaling $10.0 million in July 2012, $7.0 million in January 2013
and $5.0 million in October 2013.

Change in
Fair Value of Preferred Stock Warrant Liability. The change in the fair value of our preferred stock warrant liability for the year ended December 31, 2012 reflected an increase in warrant fair value of $36,000 compared to an increase of
$0.3 million for the year ended December 31, 2013.

For 2012 and 2013, we have incurred net losses and have not recorded any U.S. federal or state income tax
benefits for the losses as they have been offset by valuation allowances.

Liquidity and Capital Resources

We have incurred losses since inception and negative cash flows from operating activities for the years ended December 31, 2012 and 2013 and the six months ended June 30, 2014. As of June 30, 2014,
we had a deficit accumulated during the development stage of $100.4 million. We anticipate that we will continue to incur net losses for the foreseeable future as we continue research efforts and the development of our product candidates, hire
additional staff, including clinical, scientific, operational, financial and management personnel, and incur additional costs associated with being a public company.

We have funded our operations primarily through the private
placement of our equity securities and debt financing. During 2013 and 2014, we received net proceeds of $12.0 million and $8.0 million, respectively, from the issuance of convertible notes and warrants. In June 2014, we borrowed $15.0
million under our term loan with Oxford. We used approximately $0.8 million of the proceeds from this loan to pay off our existing term loan with Square 1 Bank. As of June 30, 2014, we had cash and cash equivalents of $18.8 million.

We plan to continue to fund losses from operations and
capital funding needs through future debt and equity financing, as well as potential additional collaborations or strategic partnerships with other companies or through non-dilutive financings. The sale of additional equity or convertible debt could
result in additional dilution to our stockholders. The incurrence of indebtedness would result in debt service obligations and could result in operating and financing covenants that would restrict our operations. We can provide no assurance that
financing will be available in the amounts we need or on terms acceptable to us, if at all. If we are not able to secure adequate additional funding we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate
assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially harm our business.

Our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements as of, and
for the year ended December 31, 2013, describing the existence of substantial doubt about our ability to continue as a going concern. This uncertainty arose from our results of operations and financial condition and the conclusion that we did
not have sufficient cash to operate for 12 months from year-end. The 2013 financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome of this uncertainty. See Note 1 to Notes to Financial Statements for additional information describing the circumstances that led to the inclusion of this explanatory paragraph.

We estimate that our net proceeds from this
offering will be approximately $ million after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. Along with our existing
cash and cash equivalents of $18.8 million as of June 30, 2014 we expect that the net proceeds from this offering will be sufficient to fund our capital requirements through at least the second quarter of 2016.

The following table provides a summary of the net cash flow activity for each of the periods set forth below
(in thousands):

Year Ended
December 31,

Six Months Ended June
30,

2012

2013

2013

2014

Net cash used in operating activities

$

(15,805

)

$

(16,914

)

$

(10,242

)

$

(4,836

)

Net cash provided by (used in) investing activities

3,985

(1

)



(63

)

Net cash provided by financing activities

9,833

10,063

6,061

19,574

Net (decrease) increase in cash and cash equivalents

(1,987

)

(6,852

)

(4,181

)

14,675

Comparison of
the Six Months Ended June 30, 2013 and 2014

Net cash used in operating activities was $10.2 million for the six months ended June 30, 2013 compared to $4.8 million for same period in 2014. Cash used in operating activities for the six months ended
June 30, 2013 of $10.2 million consisted primarily of our net loss of $11.7 million which was offset by non-cash items such as interest expense on our convertible notes of $0.6 million, the amortization of the debt discount associated with the fair
value of our preferred stock warrants of $1.0 million, the amortization of the beneficial conversion feature on our convertible notes of $0.5 million, stock-based compensation expense of $0.2 million and a decrease in the fair value of our warrant
liabilities of $0.2 million. Cash used in operating expenses for the six months ended June 30, 2013 reflected a decrease in working capital of $0.7 million primarily due to decreases in our accounts payable and accrued liabilities related to
completion of our Phase 2b HIV clinical trial, drug interaction studies and payments of 2012 annual performance bonuses. Cash used in operating activities for the six months ended June 30, 2014 of $4.8 million consisted primarily of our net loss of
$10.7 million which was offset by non-cash items such as interest expense on our convertible notes of $1.1 million, the amortization of the debt discount associated with the fair value of our preferred stock warrants of $0.5 million, the
amortization of the beneficial conversion feature on our convertible notes of $0.6 million, stock-based compensation expense of $1.2 million and a increase in the fair value of our preferred stock warrant liabilities of $0.7 million. Cash used
in operating expenses for the six months ended June 30, 2014 reflected an increase of $1.8 million primarily due to increases in accounts payable and accrued liabilities for initiation of our Phase 2b CENTAUR clinical trial and related clinical
manufacturing activities, our Phase 1 study in liver impaired subjects, regulatory activities supporting our IND filing with the FDA, and 2014 annual performance bonuses.

Net cash used in investing activities for the six months
ended June 30, 2014 of $0.1 million was due to the purchase of property and equipment primarily related to the move to our new leased headquarters. There was no cash used for investing activities for the six months ended June 30, 2013.

Net cash provided by financing activities for the six months
ended June 30, 2013 resulted from proceeds from the issuance of $7.0 million of convertible notes and proceeds received from stock option exercises of $0.1 million partially offset by $1.0 million used to make payments on our term loan with Square 1
Bank. Net cash provided by financing activities for the six months ended June 30, 2014 resulted from net proceeds from our term loan with Oxford of $14.9 million and the issuance of $8.0 million of convertible notes partially offset by $1.8 million
used to repay our term loan with Square 1 Bank and $1.5 million used to pay for expenses associated with our anticipated initial public offering.

Comparison of the Years Ended December 31, 2012 and 2013

Cash used in operating activities for 2012 consisted of a net loss of $18.8 million, which was offset by
non-cash items such as interest expense on our convertible notes of $0.3 million, the amortization of the debt discount associated with the fair value of our preferred stock warrants of $0.8 million, the amortization of the beneficial
conversion feature on our convertible notes of $0.5 million, and $0.4 million for stock-based compensation expense.

Cash used in operating activities in 2012 also reflected an increase in net operating assets of $1.0 million primarily due to increases in accounts payable and accrued expenses driven by our
Phase 2b trial in HIV-1 infected patients. Cash used in operating activities for 2013 consisted of a net loss of $18.6 million, which was offset by non-cash items such as interest expense on our convertible notes of $1.4 million, the
amortization of debt discount associated with the fair value of our preferred stock warrants of $1.3 million, the amortization of the beneficial conversion feature on our convertible notes of $0.8 million and $0.4 million of
stock-based compensation expense. In addition, cash used in operating activities for 2013 also reflected a decrease in the fair value of our warrant liabilities of $0.3 million. Net operating assets also decreased by $2.0 million primarily
due to lower accounts payable and accrued expenses driven by the completion of our Phase 2b trial in HIV-1 infected patients.

Net cash provided by investing activities of $4.0 million for 2012 consisted primarily of proceeds from maturities of investments. We
had no significant investing activities during 2013.

Net cash provided by financing activities for 2012 resulted from net proceeds of $10.0 million from the issuance of our convertible notes in July 2012. This was partially offset by $0.2 million
used to make payments on our term loan. Net cash provided by financing activities for 2013 consisted of net proceeds from the issuance of $12.0 million of convertible notes and $0.1 million of proceeds from stock option exercises,
partially offset by $2.0 million used to make payments on our term loan.

Operating Capital Requirements

To date, we have not generated any revenues from product sales, and we do not have any approved products. We do not know when, or if, we will generate any revenue from product sales. We do not expect to
generate significant revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates. We anticipate that we will continue to incur losses for the foreseeable future, and
we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin to commercialize any approved products. We are subject to all of the risks incident in the development of new
therapeutic products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. Upon the completion of this offering, we expect to incur additional costs
associated with operating as a public company. We anticipate that we will need substantial additional funding in connection with our continuing operations.

We believe that the net proceeds from this offering and our existing cash and cash equivalents will be sufficient to fund our operations
through at least the second quarter of 2016. However, we will require additional capital to complete the development and commercialization of CVC, if approved, and may also need to raise additional funds sooner to pursue other development activities
related to additional product candidates.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of
equity or debt financings, collaborations, strategic partnerships, licensing arrangements or non-dilutive financing. In any event, we do not expect to achieve revenue from product sales prior to the use of the net proceeds from this offering. We do
not have any committed external source of funds. Additional capital may not be available on reasonable terms, if at all. To the extent that we raise additional capital through the sale of stock or convertible debt securities, the ownership interest
of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include
increased fixed payment obligations and covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends, selling or licensing intellectual property rights
and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through collaborations, strategic partnerships or licensing arrangements with third parties, we may have to relinquish
valuable rights to CVC or our other product candidates, including our other technologies, future revenue streams or research programs, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through
stock offerings or debt financings when needed, we may

be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and commercialize CVC or our other product candidates even
if we would otherwise prefer to develop and commercialize such product candidates ourselves.

Contractual Obligations and Commitments

The following table summarizes our principal contractual obligations and commitments as of December 31, 2013 that will affect our future liquidity (in thousands):

Total

Less than1 Year

1  3Years

3  5Years

Morethan 5Years

Short-term debt(1) (2)

$

1,833

$

1,833

$



$



$



Interest on short-term debt(2)

56

56







Lease obligations(3)(4)(5)

137

137







Total

$

2,026

$

2,026

$



$



$



(1)

Our commitment for short-term debt is comprised of amounts outstanding under the Square 1 Bank term loan. The term loan matures in November 2014 and accrues interest at
a rate of 6% per year. The term loan provides for interest-only payments through November 2012 and payments for 24 months of principal and interest thereafter. We paid off our term loan with Square 1 Bank with proceeds from our $15.0 million
term loan with Oxford in June 2014.

(2)

Excludes an aggregate principal amount of $22.0 million plus accrued and unpaid interest on convertible notes outstanding as of December 31, 2013. In
addition, in March 2014, we issued an additional $8.0 million aggregate principal amount of convertible notes. All of the convertible notes and accrued and unpaid interest thereon will be converted ultimately into common stock immediately prior
to the completion of this offering.

(3)

Consists of our corporate headquarters lease encompassing approximately 7,000 square feet of office space that expires in August 2014.

(4)

On May 16, 2014, we entered into a five-year operating lease agreement for a new corporate headquarters for approximately 7,400 square feet of office space. The
lease term and allocated minimum lease payments, which are in aggregate $1.5 million over the initial term of five years, which commenced August 8, 2014.

(5)

On June 20, 2014, we entered into two capital leases for office equipment associated with our new corporate headquarters. The lease terms and minimum lease payments,
which are in the aggregate $80,000 over the lease terms of 3 years, commenced in August 2014.

Contractual Arrangements

In August 2007, we entered into a license agreement with Takeda relating to CVC (then known as
TAK-652) and TAK-220. Under the agreement, Takeda assigned to us certain patents relating to CVC and TAK-220. Under the
agreement, we paid to Takeda an upfront license fee of $3.0 million and are obligated to pay to Takeda up to $102.0 million in the aggregate in development and sales milestones. We are also obligated to pay to Takeda tiered royalties based
on aggregate annual net sales of all licensed products from the high single digit to the low teen percentage of net sales, subject to certain reductions and exceptions. Our obligation to pay royalties to Takeda expires on a country-by-country basis
upon the later of the twelfth anniversary of the earlier of the first commercial sale of the first licensed product in such country or entry of one or more generic versions of a licensed product achieving a certain market share in such country, or
the expiration of the last to expire patent assigned to us under the agreement.

We enter into contracts in the normal course of business with CROs and clinical sites for the conduct of clinical trials, preclinical research studies, professional consultants for expert advice and other
vendors for clinical supply manufacturing or other services. These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments.

In June 2014, we entered into a $15.0 million, four-year term loan with Oxford. Our obligations under the term
loan are secured by a first priority security interest in all existing and future assets, except intellectual property unless otherwise determined by applicable judicial authority. The term loan bears interest at 6.954% per annum with interest only
payments through December 31, 2015 followed by 30 equal monthly payments of principal and interest until maturity at June 1, 2018. At the time of final payment, we are required to pay an exit fee of 4% of the total loan amount. In addition, we
issued Oxford warrants to purchase an aggregate of 36,207 shares of Series B preferred stock at an exercise price of $14.50 per share, subject to adjustment for stock splits, recapitalizations and certain other events. The warrants are
exercisable for seven years from the date of issuance. We used approximately $0.8 million of the proceeds of this loan to pay off our existing term loan with Square 1 Bank.

Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements as defined
in the rules and regulations of the SEC.

Quantitative and
qualitative disclosures about market risk

Interest Rate Risk

Our cash and cash equivalents as of June 30, 2014 consisted of readily available checking and money market funds. Our primary exposure to
market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. However, because of the short-term nature of the instruments in our portfolio, a sudden change in market interest rates would not
be expected to have a material impact on our financial condition and/or results of operations. We do not believe that our cash or cash equivalents have significant risk of default or illiquidity. While we believe our cash and cash equivalents do not
contain excessive risk, we cannot provide absolute assurance that in the future our investments will not be subject to adverse changes in market value. In addition, we maintain significant amounts of cash and cash equivalents at one or more
financial institutions that are in excess of federally insured limits.

Effects of Inflation

Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation and changing prices had a significant impact on our results of operations for any
periods presented herein.

Internal Control Over Financial
Reporting

Pursuant to
Section 404(a) of the Sarbanes-Oxley Act, commencing the year following our first annual report required to be filed with the SEC, our management will be required to report on the effectiveness of our internal control over financial
reporting. To comply with the requirements of being a reporting company under the Exchange Act, we may need to upgrade our systems, including information technology, implement additional financial and management controls, reporting systems and
procedures and hire additional accounting and finance staff. For more information, please see Risk FactorsIf we fail to maintain proper and effective internal control over financial reporting in the future, our ability to produce
accurate and timely financial statements could be impaired, which could harm our operating results, investors views of us and, as a result, the value of our common stock.

We are a clinical-stage biopharmaceutical company
focused on the development and commercialization of innovative therapeutics to treat liver disease, human immunodeficiency virus, or HIV, fibrosis and inflammation. Our lead product candidate, cenicriviroc, or CVC, is a proprietary immunomodulator
that can potentially be used to treat a number of disease states with high unmet medical need. We are developing CVC for nonalcoholic steatohepatitis, or NASH, for which we are enrolling a Phase 2b clinical trial. CVC is a once-daily pill with
well-established safety and tolerability in approximately 580 subjects dosed in completed Phase 1 and Phase 2 trials, including a pharmacokinetics (PK) and safety study in subjects with liver cirrhosis and 115 HIV type 1, or HIV-1, infected subjects on treatment for up to 48 weeks. We also plan to advance CVC in a fixed-dose combination for HIV-1 infection through Phase 3 development and commercialization in collaboration with a
strategic partner or with non-dilutive financing.

CVC is a first-in-class oral, long-acting, once-daily, potent dual inhibitor, or antagonist, of chemokine receptor type 2, or CCR2, and type 5, or CCR5, with anti-inflammatory and anti-fibrotic activity.
We are initially developing CVC for NASH, a liver disease characterized by fatty deposits, cellular damage, inflammation and fibrosis. CVC binds to both CCR2 and CCR5 and blocks the migration of immune cells to the liver in response to cellular
damage, thereby disrupting in the immuno-inflammatory cascade and the activation of fibrosis generating hepatic stellate cells, or HSCs.

NASH is a serious inflammatory type of non-alcoholic fatty liver disease, or NAFLD, commonly associated with obesity, type-2 diabetes and
related metabolic disorders. NASH may evolve from fibrosis to cirrhosis and may lead to liver cancer or liver failure. Due to the growing epidemic of obesity and diabetes, NASH is projected to be the most common cause of advanced liver disease and
the most common reason for liver transplant by 2020. The NASH market opportunity is estimated to be three to five times that of hepatitis C virus, or HCV, in the United States. NASH prevalence is estimated to be approximately 9 million to
15 million people in the United States, or 3%-5% of the U.S. population, with similar prevalence in other major markets. However, a significantly higher prevalence has been reported in patient segments at greater risk. For example, NASH has
been observed in approximately 33% of obese patients in various studies.

There are no approved therapies for NASH. Current guidelines recommend managing NASH patients through lifestyle modifications and the treatment of comorbidities including obesity, diabetes and related
disorders. Although these patient management options may provide some benefit, they are generally suboptimal and have limited impact. Accordingly, the NASH market has a significant unmet need for pharmacological options that are effective and well
tolerated for this chronic condition. We believe CVC has the potential to address this unmet need based on its dual inhibitor mechanism of action and a breadth of clinical and preclinical evidence. In our completed Phase 2b study of CVC in HIV-1
infected subjects, we observed a reduction in the percentage of patients with elevated fibrosis risk scores. We have also seen anti-fibrotic effects across three animal models of liver and kidney disease. Finally, our clinical program of CVC to date
includes safety

and dosing data from approximately 580 subjects including a recently completed PK and safety study in subjects with liver
cirrhosis and our Phase 2b HIV study which treated 115 subjects for up to 48 weeks.

We are also developing CVC as part of a fixed-dose backbone in combination with lamivudine, or 3TC, for the treatment of infection by HIV-1, the virus that causes acquired immunodeficiency syndrome, or
AIDS. A fixed-dose combination product contains at least two pharmaceutical agents in a single tablet, in this case CVC and lamivudine, and may then be tested or used in combination with additional therapies to provide a complete anti-retroviral
regimen. The term backbone is commonly used in the context of HIV treatment to describe fixed-dose combination products which may be used with other HIV drugs and allow for a variety of three-drug combinations. CVC inhibits CCR5, the
primary co-receptor required for HIV-1 to infect immune cells. Despite the availability of potent and well-tolerated classes of anti-HIV therapeutics, patients on chronic therapy face

toxicities due to lifelong treatment and are particularly at risk for metabolic, cardiovascular and renal disease complications. The greatest unmet need in HIV therapy is for improved
tolerability in this chronic treatment setting. U.S. sales of HIV therapies are forecasted to be $9.6 billion in 2014 and growing to $12.8 billion in 2020, according to Datamonitor.

We believe that CVCs inhibition of CCR2 may have immuno-inflammatory benefits in HIV-1 infected
individuals at increased risk of liver, cardiovascular and kidney diseases. We have completed a 143 patient randomized double-blind controlled Phase 2b study of CVC versus efavirenz, or EFV, both in combination with emtricitabine, or FTC, and
tenofovir disoproxil fumarate, or tenofovir DF or TDF. In this study, CVC demonstrated comparable levels of viral control to EFV as well as a favorable safety and tolerability profile with fewer treatment-related adverse events, or AEs, over 48
weeks. We met with the FDA in an end-of-Phase 2 meeting in September 2013, where the U.S. Food and Drug Administration, or FDA, concurred that available safety and efficacy data support further evaluation in Phase 3 registration studies of CVC and
CVC/3TC. We intend to conduct these studies of CVC as part of a novel fixed dose combination backbone with 3TC. We believe that CVC/3TC has the potential to address the need for improved tolerability in chronic HIV treatment. We have developed a
novel fixed-dose single tablet of CVC/3TC and plan to open an IND for this product candidate and advance our HIV-1 clinical program into Phase 3 development in collaboration with a strategic partner or with non-dilutive financing.

In addition, we believe CVC has the potential to be studied
in the treatment of other CCR2 and CCR5 mediated inflammatory and fibrotic driven diseases such as kidney fibrosis, graft-versus-host disease, or GVHD, and certain cancers.

Below is our clinical and preclinical pipeline:

Strategy

Our goal is to become a leading biopharmaceutical company
developing and commercializing innovative immunomodulatory therapies for liver diseases, HIV, fibrosis and inflammation. To achieve our goal, we plan to:



Complete clinical development and seek regulatory approval of CVC in NASH. We plan to complete enrollment of our Phase 2b clinical trial
of CVC in NASH in the second quarter of 2015 and reach the primary endpoint in the second quarter of 2016. NASH is a disease driven by the growing epidemic of obesity, with a significant unmet need for approved therapies that are effective and well
tolerated. We believe CVC is an excellent candidate for the chronic treatment of NASH due to its safety profile and first-in-class dual mechanism of action targeting fibrosis-generating cells.



Establish commercial capabilities to market CVC as a leading treatment for NASH. If approved, we intend to establish a specialty
sales force and develop targeted commercial capabilities in key geographies to promote CVC to liver specialists and other physicians treating this disease. Patients with NASH are

primarily managed by a concentrated group of liver specialists in the United States. We believe this will enable us to launch CVC in NASH in a cost-effective, targeted manner.



Advance the clinical development program for CVC in HIV-1 in collaboration with a
strategic partner or with non-dilutive financing. We have obtained initial evidence of efficacy and safety in a Phase 2b clinical trial of CVC in HIV-1 infected patients. We
intend to seek collaborators or non-dilutive financing to initiate and complete Phase 3 clinical testing of a fixed-dose combination backbone of CVC/3TC in HIV-1 infected patients and seek approval of this novel CVC-containing regimen for use
in combination HIV therapy with third agents.



Opportunistically grow our pipeline through additional indications for CVC and in-licensing opportunities. We believe that CVC has the
potential to be an effective immunomodulatory treatment for other CCR2 and CCR5 mediated inflammatory and fibrotic driven diseases such as kidney fibrosis, GVHD and certain cancers. For example, results from a study of kidney fibrosis in mice were
presented at the International AIDS Conference in July 2014. We will continue to seek ways to broaden our pipeline and leverage our capabilities and expertise.

NAFLD and NASH Disease Overview

NAFLD is the most common liver disease and is associated
with obesity and type-2 diabetes. The disease is characterized by the accumulation of fat in the liver with no other apparent causes. In the United States, NAFLD affects approximately 27%-34% of the population, or an estimated 86 million to
108 million people. NASH is a more advanced and severe subtype of NAFLD. The rising prevalence of obesity-related disorders has contributed to a rapid rise in the prevalence of NASH. Approximately 10%-20% of patients with NAFLD will progress to
NASH. Current estimates place NASH prevalence to be approximately 9 million to 15 million people in the United States, or 3%-5% of the U.S. population, with similar prevalence in the EU and China. Prevalence is also rising in developing
regions, likely due to people in these regions starting to adopt a more sedentary lifestyle and westernized diet consisting of processed food with high fat and fructose content.

In addition to the accumulation of fat in the liver, NASH is
characterized by inflammation and cellular damage with or without fibrosis. NASH is a severe condition that can lead to fibrosis and eventually progress to cirrhosis, portal hypertension, esophageal varices, ascites, liver cancer and/or liver
failure. Progression to cirrhosis and other late stage complications can occur within 5 to 10 years after initial NASH diagnosis. NASH patients with obesity and/or type-2 diabetes are at a significantly higher risk of disease progression. Once the
disease advances beyond NASH to these life-threatening conditions, liver transplantation is the only alternative. The Centers for Disease Control and Prevention, or CDC, projects the prevalence of obesity to increase from 34% of the U.S. population
to 42% by 2030. Driven by the epidemic of obesity, NASH is projected to become the leading indication for liver transplant by 2020. Given the extremely limited availability of organ donors and high transplant costs, NASH patients who progress to
require transplantation will place a significant economic burden on the healthcare system.

There is a significant unmet need for well-tolerated oral treatments for NASH. As there are no approved pharmaceutical agents for NASH, its market size is difficult to estimate. However, we believe there
is a significant market opportunity in NASH and that other well-established markets targeting liver disease, such as HCV, provide a good basis for comparison. HCV affects 3.2 million people in the United States and is forecasted by Datamonitor
to have $19.2 billion of drug sales in 2016. We believe that NASH, with no cure or effective treatment available, is a significantly larger market opportunity than HCV as the prevalence of NASH is estimated to be three to five times that of HCV
in the United States.

Pathophysiology of NASH

NAFLD is increasingly recognized as the
livers manifestation of insulin resistance and is often present with obesity-related disorders and type-2 diabetes. The understanding of the mechanism of progression from healthy liver status through the stages of NAFLD to NASH and on to
life-threatening complications continues to evolve. At

the early stages of the spectrum of NAFLD, fat accumulates within the liver, a condition known as steatosis. Liver steatosis alone is normally benign and slow or non-progressive during the
earlier stage of NAFLD, known as non-alcoholic fatty liver or NAFL. NASH defines a subgroup of NAFLD patients in whom steatosis is complicated by liver-cell injury and inflammation, a condition known as steatohepatitis. Although liver damage due to
NASH has some of the characteristics of alcoholic liver disease, it occurs in people who drink little or no alcohol. NASH can lead to progressive liver fibrosis, cirrhosis and liver cancer. In addition to insulin resistance, altered fat storage and
metabolism, accumulation of cholesterol within the liver and resulting cellular damage leading to increased hepatic injury have all been implicated as important co-factors contributing to the progression of NASH. The presence of liver cell damage,
or ballooning, marked inflammation and/or fibrosis distinguishes NAFL from NASH.

The following image provides an overview of the progression of NAFLD from a healthy liver to cirrhosis:

The immune and
inflammatory response to liver cell damage is mediated through a well-described signaling network of liver and immune cells. Kupffer cells, also known as resident liver macrophages, can sense tissue injury and are the first responders to liver cell
damage. Activated Kupffer cells initiate an inflammatory response to the liver injury. This includes active secretion of a signaling protein called CCL2, also known as monocyte chemotactic protein-1, or MCP-1, which is the ligand that binds to CCR2.
Increased levels of CCL2 promote migration of bone marrow-derived pro-inflammatory monocytes that enter the liver, where they later mature into pro-inflammatory macrophages. Together, and through signaling proteins such as transforming growth factor
beta, or TGF-b, and platelet-derived growth factor, or PDGF, Kupffer cells and pro-inflammatory macrophages can activate HSCs to transdifferentiate into myofibroblasts, the primary collagen-producing cell
type responsible for liver fibrosis.

The following image illustrates the inflammatory response to liver cell damage resulting in
fibrogenesis:

Collagen production, or
fibrogenesis, is part of the temporary healing process that is normally followed by collagen degradation, or fibrolysis, and regeneration of healthy liver cells. Progressive liver fibrosis comes as a result of chronic inflammation and excessive
collagen production that is not sufficiently degraded and replaced by healthy cells. A condition of chronic liver injury such as NASH can result in excess inflammation and collagen accumulation, which in turn displaces normal functioning liver
cells.

Portal or localized fibrosis, which occurs
in the earlier stages of the disease, can progress to severe fibrosis and cirrhosis, causing liver stiffness and greatly reduced function. About one-third of patients diagnosed with early-stage NASH progress to severe fibrosis or liver cirrhosis,
which is associated with increased hospitalizations and mortality. Cirrhosis increases blood pressure through the liver, known as portal hypertension, and inhibits normal liver function. Of NASH patients who eventually progress to cirrhosis, 25%
will develop major complications of portal hypertension, such as hepatic encephalopathy and esophageal varices, within three years and, in some studies, liver cancer has been seen to eventually develop in over 40% of these patients.

Additionally, preclinical and clinical studies over the last
decade have suggested the role of bacterial translocation, the passage of bacteria and toxins, or endotoxins, from the gastrointestinal tract to extraintestinal sites in the pathogenesis of NASH. Specifically, altered or increased intestinal
permeability, also known as leaky gut, are associated with both bacterial translocation and the pathogenesis of NASH. Leaky gut leads to increased liver injury and initiates the inflammation and fibrosis process, mainly through the activation of
Kupffer cells. Bacterial translocation has also been observed in HIV-1 infected patients where it is associated with key comorbidities such as cardiovascular disease.

Current Management and Unmet Need in NASH

Currently, NASH and NAFLD are underdiagnosed due to poor
disease awareness, the insufficiency of non-invasive diagnostic tools and the lack of effective approved therapies. Patients are often diagnosed after a blood test demonstrating elevated levels of liver enzymes, alanine aminotransferase, or ALT, and
aspartate aminotransferase, or AST. A confirmed diagnosis of NASH currently requires a liver biopsy. Advances in non-invasive diagnosis and composite scoring will continue to evolve for NASH, potentially offering alternatives for diagnosis.

Liver biopsies are required to determine the NAFLD Activity Score, or NAS. The NAS system
evaluates and scores three categories on a low to high point scale system: (i) steatosis (0-3), (ii) hepatocyte ballooning, which is a form of damage to liver cells (0-3) and (iii) inflammation of the liver (0-2). The three categories
are totaled and scores range from 0 to 8, with a score of 0-2 mainly occurring in patients who are negative for NASH. Scores of 3-4 are borderline positive for NASH, while scores of 5-8 occur in patients largely considered to be diagnostic of NASH.

There are no approved therapies for NASH. The
NASH market has a significant unmet need for pharmacological options that are effective and well tolerated. Current options for managing patients with NASH are suboptimal and primarily rely on lifestyle changes, off-label pharmacotherapy and
bariatric surgery for weight loss. Each of the patient management options described below may provide some benefit, but all have limitations. We believe there are no other product candidates in development or approved that target the
immuno-inflammatory pathways responsible for fibrosis.

Lifestyle Intervention. Lifestyle modifications, specifically weight loss, are recommended for NASH patients. However, lifestyle changes are only considered clinically significant when patients are
able to reduce more than 7% of their body weight, which occurs in less than 50% of NASH patients.

Off-label Pharmacotherapy. Products utilized off label in the management of NASH comorbidities include vitamin E, insulin sensitizers such as metformin and pioglitazone, which are used for
diabetic patients, and anti-hyperlipidemic agents, pentoxifylline, and ursodiol. High-dose vitamin E has been shown in a clinical study of non-diabetic patients to reduce inflammation but not fibrosis. Vitamin E is not recommended for NASH
patients with type-2 diabetes due to lack of data, therefore the use of vitamin E is limited. Other off-label pharmacotherapies demonstrate inconsistent benefits or are associated with significant side effects.

Bariatric Surgery. Bariatric surgery is believed to
impact NASH through dramatic weight loss, but it has significant complications and drawbacks. These include a host of perioperative risk factors, the need to adhere to post-surgical diet and nutritional regimens and high costs. A relatively small
number of these procedures are performed annually on NASH patients compared to the overall NASH population, which we believe is due to the complications and drawbacks of bariatric surgery relative to NASH patient numbers. We believe widespread
increased adoption of bariatric surgery for NASH is impractical based on cost and the large number of patients who would require it. In addition, some retrospective and prospective studies have indicated that the procedure may worsen fibrosis.

Liver Transplant. Liver transplant is a
last resort for life-threatening complications progressing from NASH. NASH is currently the third most common reason for liver transplants in United States and is projected to surpass alcohol-based cirrhosis and viral hepatitis to become the leading
indication for liver transplant by 2020. The availability of liver donors is extremely limited and the cost of a liver transplant is a significant economic burden, with an estimated cost per procedure of approximately $577,000. Studies have
demonstrated that approximately 23% of patients do not survive the five-year period post-transplant.

Recent scientific advances in understanding the pathophysiology of NASH have led to the development of new investigational drugs with the
potential to address the disease through various mechanisms. CVCs immunomodulatory mechanism of action has the potential to play a differentiated role in the management of NASH. We believe that the eventual management of the disease will
include multi-targeted combination treatment approaches.

CVC is a first-in-class oral, long-acting, once-daily
immunomodulator that is a potent dual inhibitor of CCR2 and CCR5 with anti-inflammatory and anti-fibrotic activity. CVC may improve NASH and stop the progression of fibrosis by:



Reducing chronic liver inflammation. We expect CVC to inhibit the CCR2 signaling pathway, blocking the excessive infiltration of
pro-inflammatory cells, or monocytes and macrophages, to the liver initially triggered by cellular damage.



Disrupting immune signaling pathways within the liver. CVC inhibits the CCR2 and CCR5 signaling pathways, which are key mechanisms of
immune cell activation and activation of Kupffer cells and HSCs, both key drivers of fibrogenesis.



Reducing liver injury from leaky gut. CVC may reduce the impact of bacterial translocation from the gut that contributes to increased
liver injury, inflammation and fibrosis.

CVC decreases recruitment, migration and infiltration of pro-inflammatory monocytes to the site of liver injury mainly via CCR2 inhibition, thereby reducing chronic liver inflammation and fibrosis. Due to
its dual inhibitory activity on CCR2 and CCR5, CVC also disrupts important signaling pathways or cross-talk within the inflamed liver resulting in decreased Kupffer cell and HSC activity and reduced fibrogenesis, as illustrated by the
following image:

CVC blocks the binding of
key ligands involved in the immuno-inflammatory cascade, including RANTES (Regulation on Activation Normal T-cell Expressed and Secreted), Macrophage Inflammatory Protein (MIP-1a and MIP-1b) to CCR5, and MCP-1, also known as chemokine (C-C motif) ligand 2 (CCL2), to CCR2.

The link between CCR2 and immune cell activation and fibrosis has been well established. In a study of fibrosis in mice, mice with a
targeted deletion of CCR2 exhibited less immune cell activation and markedly reduced fibrosis. In addition, levels of CCL2 in the liver have been shown to correlate with the level of immune cell infiltration in the liver during fibrosis in humans
and mice. In preclinical studies, CVC inhibited the binding of CCR2 at very low concentrations.

CCR5 has also been shown to play a central role in liver fibrosis. CCR5 is up-regulated in
patients with liver cirrhosis, confirming the activation of this pathway in fibrogenesis. In a mouse model of fibrosis, mice without the expression of CCR5 exhibited reduced liver fibrosis and decreased activation of HSCs as compared to normal mice.
In preclinical studies, CVC inhibited the binding of CCR5 at very low concentrations.

In addition, we believe CVC has potential to positively impact the leaky gut thereby reducing liver injury. In a randomized 48-week Phase 2b study of HIV-1 patients treated with CVC, the results showed
decreases in plasma levels of soluble CD14, a biomarker of monocyte activation and of bacterial translocation. Soluble CD14 is known to be an independent predictor of mortality in HIV patients.

Preclinical CVC Studies in NASH

We have investigated CVC in two well characterized animal
models for NASH and liver fibrosis. We demonstrated significant anti-fibrotic activity of CVC and no adverse effects on vital organ systems. We believe that these models are relevant as they are representative of the pathophysiology of NASH and
fibrosis in a clinical setting.

NASH mouse
model

A NASH mouse model, combining
glucose intolerance and high fat diet, two key components of NASH in humans, was used to study potential effects of CCR2 and CCR5 antagonism on liver fibrosis. Endpoints of the study included body and liver weight, plasma and liver biochemistry,
histopathologic analyses and gene expression. In this model, insulin resistance was induced in male mice by a single injection of 200 µg streptozotocin, or STZ, two days after birth, followed by a
high-fat diet, or HFD, beginning at 4 weeks of age. From 6 to 9 weeks of age, 3 groups of animals (n=6/group) received CVC at doses of 0 (vehicle control), 20 (low dose) or 100 (high dose)
mg/kg/day. At 9 weeks of age, biochemical, gene expression and histological evaluations of the liver were conducted in a blinded manner.

In the Week 9 analysis, CVC treatment had no effect on body or liver weight, whole blood
glucose or liver triglyceride levels. Mean measurements of ALT levels, which is an enzyme in the blood found mainly in the liver, were significantly decreased in both CVC treatment groups compared to the control group (133±80, 58±12
and 52±13, units/liter for vehicle, low and high dose CVC, respectively; p1<0.05), as illustrated by the following chart:

The mean percentage of
fibrosis area was significantly decreased by CVC treatment relative to control (0.29% ± 0.14, 0.20% ± 0.06 and 0.61% ± 0.23 for 20 mg/kg/day, 100 mg/kg/day and control, respectively; p<0.01), as illustrated by the
following chart:

1

A p-value is a statistical measurement that describes the probability that the observed effects of CVC were statistically significant compared to the control group. A
p-value of less than 0.05 suggests statistical significance to the results observed.

In addition, gene expression of collagen type 1 in whole liver lysates decreased by
27%37% with CVC treatment. Importantly, the mean NAS was significantly decreased with CVC treatment (5.3±0.5, 4.0±0.6 and 3.7±0.8 for vehicle, low and high dose CVC, respectively; p<0.05), primarily based on reduced
inflammation and ballooning scores, as noted in the following table:

Score

Vehicle

(N=6)

CVC

20 mg/kg/day

(N=6)

CVC

100mg/kg/day

(N=6)

Steatosis

0

1

1

4

6

5

2

2

3

Lobular inflammation

0

1

3

3

2

6

3

3

3

Hepatocyte ballooning

0

1

1

3

2

2

6

3

3

NAS, mean
(±SD)

5.3
(±0.5)

4.0
(±0.6)

3.7
(±0.8)

CVC vs vehicle

P<0.05

P<0.01

Rat liver fibrosis model

The 12-week rat liver fibrosis model was
utilized to determine if CVC has anti-fibrotic effects in rats with thioacetamide, or TAA, induced liver injury and evaluate the timing of treatment intervention relative to disease onset. TAA is a known toxin widely used for fibrosis induction in
animal models. In this model, fibrosis was induced in male Sprague-Dawley rats by intraperitoneal, or IP, administration of TAA at a dose of 150mg/kg, 3 times a week, for 8 weeks. Rats received CVC at doses of 0 (vehicle control), 30
mg/kg/day (low dose) or 100 mg/kg/day (high dose), as illustrated by the following image.

With early intervention,
or Group 1 (concurrent treatment of TAA and CVC for 8 weeks), liver collagen was significantly decreased by CVC at low and high dose (49% and 38%, respectively) compared to control (p<0.001). Protein levels of collagen type-1 protein and
alpha smooth muscle actin were also decreased in the CVC treatment groups. With emerging fibrosis intervention, or Group 2 (TAA for 8 weeks, CVC from Weeks 4 to 8), the low dose of CVC significantly decreased liver collagen by 36%
(p<0.001) but no reduction was seen

with the high dose. CVC treatment had no effect once cirrhosis was established, or Group 3 (TAA for 8 weeks, CVC for 4 weeks after cessation of TAA administration).

This study was conducted by Dr. Scott Friedman, Chief of
the Division of Liver Diseases at the Mount Sinai Medical Center in New York City. Dr. Friedman presented the results from the NASH mouse model study and the rat TAA-induced fibrosis study at the American Association for the Study of Liver
Disease, or AASLD, annual meeting in November 2013.

The following image illustrates the anti-fibrotic effects in rats treated with CVC:

Mouse kidney fibrosis model

A unilateral ureteral obstruction, or
UUO, model was conducted in mice to determine the effect of CVC on kidney fibrosis. In this model, kidney fibrosis can be induced in mice within five days of ureteral obstruction. Mice underwent sham surgery and were treated with vehicle control or
ligation of the right ureter and treated with either vehicle control or 7 mg/kg/day or 20 mg/kg/day of CVC. After five days of treatment, the extent of kidney fibrosis was measured using histological evaluation in a blinded fashion.

In the study, both dose groups of CVC showed a statistically
significant reduction in kidney fibrosis compared to vehicle control. We believe this data provides additional evidence of the anti-fibrotic mechanism of CVC which may be relevant to the treatment of NASH with fibrosis as well as other fibrotic
indications such as diabetic neuropathy.

Safety and
Pharmacokinetics of CVC

We have conducted several nonclinical studies to characterize the mechanism, efficacy, safety and toxicology of CVC.
We have demonstrated the safety of CVC in animals, with no behavioral or physiologic changes observed in treated animals or notable effects on cardiovascular, respiratory or other systems. No significant safety findings were observed across
preclinical studies that evaluated dose levels of CVC and with oral doses in rodents up to greater than 38 fold the currently used clinical dose level equivalents. CVC has nanomolar potency against both CCR2 and CCR5. In ex-vivo studies, CVC
inhibited CCR5 with an IC50 of 3.1 nanomoles and CCR2 with an
IC50 of 5.9 nanomoles.

CVC has been evaluated in a total of 17 completed
Phase 1 and Phase 2 clinical trials in approximately 580 healthy volunteers and patients with HIV-1. CVC has demonstrated a favorable safety and tolerability profile,

including in a 48-week Phase 2b study of CVC in which 115 HIV-1 infected patients were treated with CVC. Across the completed clinical trials,
most adverse events observed had been mild or moderate in severity. The most commonly reported treatment-emergent adverse effects were nausea, diarrhea, headache, rash, fatigue and upper respiratory tract infection. CVC has also been tested in
Phase 1 and Phase 2 clinical studies in regimens including ritonavir, atazanavir/ritonavir, darunavir/ritonavir, tenofovir disoproxil fumarate, efavirenz, dolutegravir, midazolam and emtricitabine/tenofovir disoproxil fumarate.

The pharmacokinetic and pharmacodynamic, or PK/PD,
characteristics of CVC have been well characterized in both healthy volunteers and patients. Pharmacokinetics refers to the study of drug absorption, distribution, metabolism and elimination when administered to patients. Pharmacodynamics refers to
the study of the effects a drug has on a patient, including the mechanism of action of the drug and effects of various doses or concentrations of the drug. We have shown good bioavailability of CVC as an oral, single tablet formulation. With a long
half-life of 30-40 hours, CVC is dosed once daily, making it convenient for long-term treatment and improved patient adherence. No dose-limiting toxicities have been observed to date.

Clinical Evidence of Anti-fibrotic Activity of CVC

In addition to the anti-fibrotic effects of CVC demonstrated
in preclinical models, we have gathered supportive evidence of similar properties in humans through our clinical Phase 2b study, conducted in 143 HIV-1 infected subjects treated with CVC for up to 48 weeks. Liver disease is prevalent in HIV-infected
patients, can occur with or without viral hepatitis co-infection, and has emerged as a major cause of morbidity and mortality.

As part of assessing the potential benefits of CVC in subjects with NASH and liver fibrosis, we performed a retrospective analysis of two
well-established predictive fibrosis risk scores, APRI (AST to platelet ratio index) and FIB-4 (Fibrosis-4) in this HIV study. These predictive fibrosis risk scores were calculated based on standard blood chemistry tests. An APRI score below 0.5 and
a FIB-4 score below 1.45 have each independently been shown to be predictive of the absence of clinically significant liver fibrosis. Our pooled analysis of all CVC-treated subjects assessed the fibrosis scores at baseline and following 24 and 48
weeks of treatment and revealed that improvements of these fibrosis risk scores were observed with CVC over time. A total of 113 subjects were evaluable at baseline; 92 subjects had paired data at baseline and Week 24, and 80 subjects had paired
data at baseline and Week 48.

We recently completed a Phase 1 study to compare the PK and safety of CVC in a total of 31 adult subjects with either mild to moderate liver impairment (Child-Pugh score of A or B, respectively; N=16)
compared to healthy subjects with normal hepatic function matched for age, body weight and gender (N=15). Child-Pugh is a well-established medical score used to assess the severity of liver disease that incorporates total bilirubin, serum
albumin, prothrombin time, ascites and hepatic encephalopathy. Cirrhotic patients can be classified as having mild (Child-Pugh A), moderate (Child-Pugh B) or severe (Child-Pugh C) liver impairment. Patients with normal hepatic function
are those without known liver disease and do not meet the criteria of the Child-Pugh classification.

The study assessed the PK, safety and tolerability of CVC in subjects with liver impairment compared with that of healthy subjects. CVC
was administered orally, once daily for 14 days at 150mg. CVC concentrations were not increased in subjects with mild hepatic impairment compared to matched healthy controls and were increased by approximately 50% in subjects with moderate hepatic
impairment. CVC was generally well tolerated, regardless of hepatic impairment. All adverse events, or AEs, were mild or moderate in severity, except for an AE of liver function test abnormal of severe intensity reported in a moderately
impaired subject with an 18-year history of cirrhosis and hepatitis C; this AE resolved, and CVC dosing was completed without treatment interruption. AEs occurring in ³ 2 subjects were headache (N=5), dry
mouth (N=2), epigastric discomfort (N=2), and flatulence (N=2). No serious AEs were reported. Based on these findings, no dose adjustment is anticipated in patients with mild or moderate hepatic impairment.

In September of 2014,
we initiated our Phase 2b of concept study, entitled Cenicriviroc Efficacy and Safety Study in Adult Subjects with Nonalcoholic Steatohepatitis and Liver Fibrosis, which we refer to as CENTAUR. This trial is a randomized, double-blind
study of CVC versus placebo in patients with NASH and liver fibrosis, including those with type-2 diabetes and/or one or more components of metabolic syndrome. The study is being conducted in North America, Europe and Australia, and is led by
Dr. Scott Friedman as Study Chairman. The study is targeting to enroll approximately 250 patients in this two-arm clinical trial randomized 1:1 for once-daily treatment with CVC or placebo for a first period of one year. Following the
primary endpoint at one year, patients on CVC will continue on CVC and patients on placebo will either start receiving CVC or continue on placebo for a second year (1:1). The primary analysis will be conducted at one year and endpoints will include
a two point improvement in NAS score without worsening of fibrosis as assessed by liver biopsy, resolution of NASH, collagen morphometry, validated fibrosis scores, noninvasive imaging and biomarkers. Endpoints will be measured again at two years.
We expect to reach our primary endpoint in the second quarter of 2016. In September 2013, the AASLD and the FDA conducted a joint workshop focused on trial designs and endpoints in drug and diagnostics development for liver disease secondary to
NAFLD, including NASH. We believe the CENTAUR study design incorporates surrogate endpoints that may form the basis for demonstrating efficacy required for approval based on feedback from experts involved in this workshop and feedback from the FDA
in a June 2014 meeting. We expect additional FDA guidance to be available by the time we plan our registration studies.

HIV Disease Overview

HIV is a retrovirus that infects cells of the immune system such as T lymphocytes, specifically CD4+ T cells, dendritic cells
and macrophages. Infection leads to a progressive weakening of the immune system and ultimately results in AIDS. The number of people living with HIV was estimated to be about 35.3 million worldwide in 2012. The number of people who died from
AIDS-related illnesses worldwide in 2012 was approximately 1.6 million. In the United States, approximately 50,000 new cases of HIV are diagnosed every year.

Current Management and Unmet Need in HIV-1 Infection

The leading recommendations for HIV treatment were published
by the World Health Organization in 2013. Generally recommended first line therapy is a combination of three or more anti-HIV drugs sometimes referred to as Highly Active Antiretroviral Therapy, or HAART.

The following image provides an overview of the current
treatment paradigm for treatment-naïve HIV-1 infection:

Six different classes of anti-HIV drugs are currently available to HIV patients:
nucleoside/nucleotide reverse transcriptase inhibitors, or NRTIs, non-nucleoside reverse transcriptase inhibitors, or NNRTIs, protease inhibitors, or PIs, entry inhibitors including a fusion inhibitor and a CCR5 antagonist, and integrase inhibitors.

HAART generally involves the use of
two NRTIs as a backbone combined with a third agent; either a protease inhibitor, or PI, a boosted PI or an NNRTI; or an integrase inhibitor combined in a single tablet regimen, or STR. HAART has simplified the treatment of HIV and resulted in
a dramatic improvement in virologic success leading to a decrease in the number of AIDS cases. Single-tablet regimens are critical for the effective management of HIV-1 as they are demonstrated to improve patient adherence and viral control.
Datamonitor forecasted United States sales of HIV therapies to be $9.6 billion in 2014 and growing to $12.8 billion in 2020.

We believe there is a medical need for an alternative backbone for fixed-dose combinations, as tenofovir DF is the most common backbone
component of HIV treatment and part of almost every preferred first-line treatment regimen in the AIDSinfo treatment guidelines. Although HIV patients who tolerate HAART are living longer, HAART is not curative and therefore life-long treatment is
required. Furthermore, despite recently approved potent and well-tolerated classes of third agent drugs, including integrase inhibitors, patients with HIV face chronic toxicity and are developing and dying from age-related diseases a
decade younger than their uninfected counterparts. Some age-related diseases observed with increasing frequency in HIV patients despite viral suppression on HAART include cardiovascular, cerebrovascular, renal, immunologic, neurologic and bone
diseases. A 10-year Veterans Health Administration study, or the VA study, of over 10,000 HIV patients showed that patients taking tenofovir DF, a component of the tenofovir disoproxil fumarate/emtricitabine, or TDF/FTC, backbone used in most
treatment-naïve patients as part of a STR, are at increased risk for clinically significant irreversible kidney toxicity. Even after accounting for demographics, HIV-related factors, comorbidities and other antiretroviral drugs, the VA study
found that tenofovir DF remained independently associated with an elevated risk of proteinuria, rapid decline in kidney function and development of chronic kidney disease.

Data continue to show that chronic immune activation and
inflammation may play an important role in common comorbidities associated with HIV, including metabolic and cardiovascular complications, despite chronic viral suppression.

Mechanism of CVC in HIV-1

HIV infects cells of the immune system by binding to the CD4
receptor on the host cell, which is present on the surface of many lymphocytes. One of the main types of cells that HIV infects is the T-helper lymphocyte. These cells play a crucial role in the immune system, by coordinating the actions of other
immune cells. Of all approved antiretrovirals for the treatment of HIV, CCR5 inhibitors are the only agents that target the host cells, providing a differentiated approach to existing HIV therapy.

CCR5 is the primary chemokine receptor responsible for entry
of HIV-1 into host cells. CCR5 inhibition has been proven as an effective approach for targeting CCR5-tropic HIV-1 as demonstrated by maraviroc, the first approved chemokine receptor inhibitor. While it
validates CCR5 as a target in HIV treatment, maravirocs twice-daily dosing rules out its use once-daily as part of a single-tablet regimen, the mainstay of first-line treatment demonstrated to positively impact both patient adherence and viral
suppression. CVC is a potent once-daily inhibitor of CCR5 and CCR2 with a long half-life, and has shown potent anti-HIV activity and efficacy in clinical trials. In addition to its proven antiviral effects, we believe the anti-inflammatory and
anti-fibrotic potential of CVC may help address the remaining common comorbidities observed in HIV patients. Furthermore, we have developed a formulation combining CVC with 3TC in a single tablet, providing a new potential backbone for
treatment-naïve HIV-1 patients.

Clinical Data of CVC in
HIV

The efficacy, pharmacokinetics,
tolerability and safety of CVC in humans have been evaluated in approximately 580 subjects in 15 Phase 1 clinical trials and 2 Phase 2 clinical trials. This includes safety and tolerability data on 115 HIV-infected subjects treated up to 48 weeks.

Study 201 was a double-blind,
randomized, placebo-controlled, dose-ranging Phase 2a study of CVC for 10 days in 54 subjects with CCR5-tropic HIV-1 infection, for which results were previously reported in the Journal of AIDS in 2011. Subjects were antiretroviral
treatment-experienced, CCR5 antagonist-naïve, with HIV-1 RNA levels of at least 5000 copies/mL and CD4+ cell counts of at least 250 cells/mm3. The primary objectives of this study were to determine the antiviral activity, safety and tolerability of CVC
monotherapy, and the secondary objectives were to determine PK, dose response and viral kinetics of CVC at 25, 50, 75, 100 and 150 mg dose levels versus placebo and between dose levels. Secondary objectives also included evaluating the initial
drug-resistant viral mutations that might emerge following 10 days of CVC monotherapy. Exploratory assessment of changes in MCP-1, hs-CRP and IL-6 levels was conducted. The 100 mg dose utilized a different formulation of CVC that is no longer used
so it was excluded from the efficacy endpoints. In the Phase 2a study, CVC showed a potent and durable effect in reducing HIV-1 RNA levels that persisted several days after patients stopped taking CVC. The median nadir changes from Baseline for the
25, 50, 75, and 150 mg doses were 0.7, 1.6, 1.8, and 1.7 log10 copies/mL, respectively, as illustrated by the following chart:

CVC showed potent
antiviral activity that persisted well after completion of dosing. CVC was generally well tolerated at the doses studied and no safety concerns were identified. There were no serious adverse events (SAEs) or other significant AEs, and there were no
discontinuations because of an AE. The PK/PD analysis showed that maximum plasma concentrations of CVC were achieved in three to four hours with all doses and steady state concentrations were achieved at eight days. Exploratory assessment of MCP-1,
hs-CRP and IL-6 levels found significant dose-dependent increases in MCP-1. On day 10, least square mean MCP-1 levels obtained by flow cytometry were 56.3, 94.2, 34.4 and 334.3 pg per milliliter greater than at baseline in the 25, 50, 75
and 150-mg dose groups, respectively, compared with a slight decline in the placebo group. At the 50 and 150-mg doses, these results were statistically significant (p = 0.024 and p = 0.001, respectively). CVC
had minimal effect on hs-CRP and in IL-6 levels at day 10 compared with baseline in any of the dose groups.

Phase 2b Double-Blind, Double-Dummy, 48-Week Study (Study 202)

Study 202 was a randomized, double-blind, double-dummy, 48-week Phase 2b study in antiretroviral
treatment-naïve HIV-1 infected subjects with CCR5-tropic HIV-1 virus. The study evaluated the efficacy, safety, and tolerability of CVC 100 mg and CVC 200 mg compared to EFV; all administered orally in combination with emtricitabine
and tenofovir disoproxil fumarate, or FTC/TDF. Administration of both doses of CVC and EFV was blinded using a double-blind, double-dummy design.

The following image provides an overview of the treatment design for Study 202:

r

= randomized

A greater proportion of CVC-treated than EFV-treated subjects completed the study, 42 (71%), 41 (73%), and 17 (61%) for the CVC 100
mg, CVC 200 mg, and EFV treatment arms, respectively. The percent of subjects with virologic success, defined as HIV-1 RNA < 50 copies/mL using the intent-to-treat, or ITT, population, was comparable among the 3 treatment arms at Week 24, which
was the primary efficacy endpoint: 76% with CVC 100 mg, 73% with CVC 200 mg, and 71% with EFV. Virologic success was higher in the CVC arms than in the EFV arm at Week 48 at 68% with CVC 100 mg, 64% with CVC 200 mg, and 50% with EFV.

At both Week 24 and Week 48, the percentage of
subjects with virologic non-response was higher in the CVC arms than in the EFV arm (Week 24: 12% with CVC 100 mg, 14% with CVC 200 mg and 4% with EFV; Week 48: 15% with CVC 100 mg, 20% with CVC 200 mg and 11% with
EFV), and the percentage of subjects without virologic data was higher in the EFV arm than in the CVC arms (Week 24: 12% with CVC 100 mg, 13% with CVC 200 mg and 25% with EFV; Week 48: 17% with CVC 100 mg, 16% with CVC
200 mg and 39% with EFV). A PK/PD analysis revealed a trend towards improved virologic outcomes with increasing CVC concentration.

CVC showed a favorable safety profile with fewer treatment-related AEs, fewer AEs of at
least Grade 3 in severity, and fewer AEs leading to discontinuations compared to EFV as shown in the following table.

Adverse event, n (%)

CVC

100 mg

N=58

CVC

200 mg

N=57

EFV

600 mg

N=28

Subjects with at
least one AE

51 (88%)

48 (84%)

27 (96%)

Grade 3

2 (3%)

3 (5%)

3 (11%)

Grade
4

0 (0%)

0 (0%)

1 (4%)

AEs leading to discontinuation

0 (0%)

1 (2%)

6 (21%)

Serious
AEs

1 (2%)

1 (2%)

1 (4%)

Deaths

0 (0%)

0 (0%)

0 (0%)

Any Grade 2 or higher treatment-related

AE (occurring in
³5%)

Abnormal dreams

1 (2%)

0 (0%)

3 (11%)

Insomnia

0 (0%)

0 (0%)

3 (11%)

Rash events

1 (2%)

0 (0%)

2 (7%)

Nausea

0 (0%)

2 (4%)

2 (7%)

Both doses of CVC were well
tolerated and no apparent dose-relationship or dose-limiting toxicities were observed. No clinically relevant changes in electrocardiogram or vital parameters were observed during the 48-week treatment period.

Two patients in the CVC treatment arms
experienced SAEs which were not considered drug-related by the investigators. One subject had an SAE of gastroenteritis of moderate severity that occurred one month after the last dose of CVC. Another subject had an SAE of infection of the cornea in
one eye of severe intensity associated with ulceration and temporary blindness. The subjects continued to take CVC and completed the study.

CVC treatment was associated with a favorable lipid profile and led to sustained reductions in total and LDL cholesterol over 48 weeks, as
shown in the following charts:

In a subsequent end-of-Phase 2 meeting in September
2013, the FDA concurred that available efficacy and safety data support further evaluation of CVC and CVC/3TC in Phase 3 registration studies for the treatment of HIV-1 infected patients. We plan to submit an IND and advance clinical
development of CVC/3TC in treatment-naïve HIV-1 infected patients in a single-tablet, fixed-dose combination. We believe this product candidate has the potential to provide a new backbone for multi-drug combination therapy for HIV. We are also
planning a Phase 3 of CVC/3TC/EFV as a single tablet regimen. We plan to advance this Phase 3 program in collaboration with a strategic partner or with non-dilutive financing.

Phase 2b data from Study 202 evaluating CVC in combination
with FTC/TDF support the evaluation of CVC/3TC in Phase 3 studies as part of a three-drug combination regimen. Both FTC and 3TC are cytosine analogues, are comparable in their structure, provide similar efficacy and safety and are recommended
interchangeably in international treatment guidelines. Based on these similarities, we extrapolated that clinical data generated with CVC and FTC in Study 202 support the evaluation of CVC/3TC in Phase 3 studies. The FDA concurred with this
determination at our end of Phase 2 meeting for CVC and CVC/3TC in September 2013.

In addition, a study in 39 healthy subjects, which we call Study 109, was conducted to evaluate the pharmacokinetics
of CVC 200 mg and 400 mg and EFV 600 mg when co-administered. Study 109 demonstrated that CVC concentrations were decreased when EFV was co-administered, with a reduction of 23% for Cmax, 48% for Cmin, and 43% for AUC0t, and that increasing the dose of CVC was able to offset this
interaction. CVC had no notable effects on EFV concentrations. All adverse events in Study 109 were mild to moderate and consistent with those of previous studies with CVC and EFV with dizziness and headache being the most commonly observed. This
data, along with the supportive Phase 2b efficacy data from Study 202, support the evaluation a fixed dose combination product of CVC/3TC/EFV in Phase 3 studies. Prior to the start of Phase 3 studies, we intend to conduct additional Phase 1 studies,
including bioavailability and drug-drug interaction studies for CVC/3TC and CVC/3TC/EFV fixed dose combination products.

Competition

The biopharmaceutical industry is characterized by intense competition and rapid innovation. Although we believe that we that we hold a
leading position in the understanding of chemokine signaling inhibition in liver disease and HIV, our competitors may be able to develop other compounds or drugs that are able to achieve similar or better results. We face significant competition
from large multinational pharmaceutical companies, established biotechnology companies and specialty pharmaceutical companies, which have materially greater financial, manufacturing, marketing, research and drug development resources than we do.
Large pharmaceutical companies in particular have extensive expertise in preclinical and clinical testing and in obtaining regulatory approvals for drugs. Smaller or early-stage companies may also prove to be significant competitors, particularly
through collaborative arrangements with large, established companies. In addition, academic institutions, government agencies and other public and private organizations conducting research may seek patent protection with respect to potentially
competitive products or technologies. These organizations may also establish exclusive collaborative or licensing relationships with our competitors. We believe the key competitive factors that will affect the development and commercial success of
our product candidates are efficacy, safety and tolerability profile, reliability, convenience of dosing, price and reimbursement.

We are aware of several companies with development programs targeting NASH in clinical trials including Intercept Pharmaceuticals, Inc.,
Gilead Sciences, Inc., Galectin Therapeutics Inc. Galmed Medical Research Ltd., Genfit Corp., Novartis AG, Novo Nordisk A/S Takeda Pharmaceutical Company Limited, or Takeda, Raptor Pharmaceutical Corp., Immuron Ltd., Shire plc and Conatus
Pharmaceuticals Inc. We are not aware of a competitor with an active development program for NASH targeting CCR2/CCR5 inhibition.

We do not own or operate manufacturing facilities for the production of any of our product candidates, nor do we have plans to develop our
own manufacturing operations in the foreseeable future. We currently rely on third-party contract manufacturers, or CMO, for all our required raw materials, drug substance and drug product needs for preclinical research and clinical trials. We do
not have long-term agreements with any of these third parties. We also do not have any current contractual relationships for the manufacture of commercial supplies of any of our product candidates if they are approved. If any of our products are
approved by any regulatory agency, we intend to enter into agreements with a third-party contract manufacturer and one or more back-up manufacturers for the commercial production of those products. Development and commercial quantities of any
products that we develop will need to be manufactured in facilities, and by processes, that comply with the requirements of the FDA and the regulatory agencies of other jurisdictions in which we are seeking approval.

Takeda License

In August 2007, we entered into an exclusive license
agreement with Takeda relating to CVC (then known as TAK-652) and TAK-220. Under the agreement, Takeda assigned to us certain patents relating to CVC and TAK-220. Takeda also agreed not to enforce certain ancillary patents relating to CVC and
TAK-220 against us and granted us an exclusive license under know-how and other information relating to CVC and TAK-220, in each case on a worldwide basis to manufacture, develop and commercialize both product candidates globally. The agreement was
amended in November 2009 to update the lists of assigned patents and ancillary patents.

Under the agreement, we agreed to use commercially reasonable efforts to develop CVC for the treatment of HIV infection and, if we choose to develop CVC for any other indication or choose to develop
TAK-220, we must use commercially reasonable efforts with respect to such development activities. We must also use commercially reasonable efforts to obtain regulatory approval for licensed products we develop in the U.S. and Europe, and in any
other countries we deem appropriate. In addition, we must achieve first commercial sale of a licensed product within a specified period of time after receipt of regulatory approval therefor, subject to certain exceptions. Finally, we must use
commercially reasonable efforts to maintain, apply for patent term extensions with respect to, and take action against infringement of the patents assigned to us under the agreement. During the term of the agreement, we may not develop or
commercialize any CCR5 antagonist products, other than CVC and TAK-220, for any indications for which we are developing or commercializing CVC and TAK-220.

Under the agreement, we paid to Takeda an upfront license fee of $3.0 million and are obligated to pay to Takeda up to
$102.0 million in the aggregate in development and sales milestones. We are also obligated to pay to Takeda tiered royalties based on aggregate annual net sales of all licensed products from the high single digit to the low teen percentage of
net sales, subject to certain reductions and exceptions. Our obligation to pay royalties to Takeda expires on a country-by-country basis upon the later of the twelfth anniversary of the earlier of the first commercial sale of the first licensed
product in such country or entry of one or more generic versions of a licensed product achieving a certain market share in such country, or the expiration of the last to expire patent assigned to us under the agreement.

Our agreement with Takeda continues in effect on a
country-by-country and licensed product-by-licensed product basis until the expiration of our obligation to pay royalties to Takeda in such country with respect to such licensed product. Either we or Takeda may terminate the agreement for the other
partys material breach of the agreement, except that Takeda may terminate the agreement only with respect to the applicable licensed product if we materially breach our non-compete obligations. We may terminate the agreement under certain
circumstance if we determine that further development or sale of licensed products is not feasible. If we terminate the agreement under such circumstances or Takeda terminates the entire agreement for our material

breach, we would lose our right to use the know-how and other information relating to CVC and TAK-220 that was licensed to us by Takeda and, upon Takedas request, we must assign back to
Takeda or abandon the patents assigned to us under the agreement and transfer to Takeda other materials and intellectual property that we developed during the term of the agreement.

Intellectual Property

The proprietary nature of, and protection for, our product candidates and our discovery programs, processes and know-how are important to
our business. We have sought patent protection in the United States and internationally for CVC and related product candidates, and any other inventions to which we have rights, where available and when appropriate. Our policy is to pursue, maintain
and defend patent rights in strategic areas, whether developed internally or licensed from third parties, and to protect the technology, inventions and improvements that are commercially important to the development of our business. We also rely on
trade secrets that may be important to the development of our business.

Our commercial success will depend in part on obtaining and maintaining patent protection and trade secret protection of our current and future product candidates and the methods used to develop and
manufacture them, as well as successfully defending these patents against third-party challenges. Our ability to stop third parties from making, using, selling, offering to sell or importing our products depends on the extent to which we have rights
under valid and enforceable patents or trade secrets that cover these activities. We cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the
future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our product candidates, discovery programs and processes. For this and more comprehensive
risks related to our intellectual property, please see Risk FactorsRisks Relating to Our Intellectual Property.

We own exclusively several patents covering CVC which we obtained from Takeda, and have also licensed intellectual property relating to
CVC from Takeda. Patents owned by or licensed to us covering CVC composition of matter are expected to expire in the United States in 2022, before any potential patent term extensions or exclusivity protection or adjustments for patent office
delays, and in 2023 when such adjustments for patent office delays are considered. We own or have rights to additional patents and pending patent applications that cover formulations, combination products, and use of CVC to treat various indications
with expected patent expiration dates in the United States that range from 2022 (for issued patents) to potentially 2035 (for currently-filed provisional patent applications if patents were to issue on non-provisional applications filed thereon).

Our patent portfolio for CVC contains patents
directed to the composition of matter of CVC. As of September 30, 2014, we owned one issued U.S. patent and several corresponding foreign patents directed specifically to the composition of matter of CVC. Foreign patents for the composition of
matter of CVC have been granted in Canada, Japan and the European Union (with corresponding validations in 18 European countries: Austria, Belgium, Switzerland, Czech Republic, Germany, Denmark, Spain, Finland, France, United Kingdom, Greece,
Ireland, Italy, Netherlands, Portugal, Sweden, Slovak Republic and Turkey). We expect that the composition of matter CVC patent, if the appropriate maintenance, renewal, annuity or other governmental fees are paid, will expire in 2023 (U.S.) when
adjustments for patent office delays are considered, and 2022 (international). It is possible that the term of a composition of matter patent in the United States could be extended up to five additional years under the provisions of the Hatch-Waxman
Act. Patent term extension may also be available in certain foreign countries upon regulatory approval.

Our patent portfolio also includes patents directed to CVC compound classes, pharmaceutical compositions, combination products, methods of
synthesis and methods of use of CVC to treat HIV and certain inflammation, autoimmune and other indications. As of September 30, 2014, we owned three issued U.S. patents and several corresponding foreign patents directed to such subject matter.
Foreign patents have been granted in Canada, Japan and the European Union (where the EP patent directed to CVC compound classes, their pharmaceutical

compositions, use of CVC compound classes for treating HIV, and method of making CVC compound classes has validations in 4 European countries: Germany, France, United Kingdom, and Ireland; and
the EP patent directed to use of CVC for treating inflammation, autoimmune and other diseases, combo therapy of CVC, and process of making CVC has validations in 18 European countries: Austria, Belgium, Switzerland, Czech Republic, Germany, Denmark,
Spain, Finland, France, United Kingdom, Greece, Ireland, Italy, Netherlands, Portugal, Sweden, Slovak Republic and Turkey). We also own pending applications in the United States and Japan directed to such subject matter. We expect that the CVC
compound class, pharmaceutical compositions, methods of synthesis, and methods of use patents, if the appropriate maintenance, renewal, annuity or other governmental fees are paid, will expire in 2023 (U.S.) and 2022 (international), and that the
CVC combination products patents will expire in 2022 (United States and international). In addition, our patent portfolio includes pending applications directed to CVC product formulations, combination products, and other therapeutic use of CVC.
These patent applications, if issued as patents, will have potential patent expiration dates ranging from 2034 to 2035. Below is a summary of our patents and patent applications and the projected patent terms and, if applicable, extension dates.

*

Projected term if patents are issued

**

Projected extension date. Europe may vary by country

Government Regulation and Product Approval

Governmental authorities in the United States, at the federal, state and local level, and analogous authorities in other countries
extensively regulate, among other things, the research, development, testing, manufacture, labeling, packaging, promotion, storage, advertising, distribution, marketing and export and import of products such as those we are developing. Our product
candidates must be approved by the FDA through the new drug application, or NDA, process before they may be legally marketed in the United States and by the European Medicines Agency, or EMA, through the marketing authorization application, or MAA,
process before they may be legally marketed in Europe. Our product candidates will be subject to similar requirements in other countries prior to marketing in those countries. The process of obtaining regulatory approvals and the subsequent
compliance with applicable federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

In the United States, the FDA regulates drugs under the
Federal Food, Drug, and Cosmetic Act, or the FDCA, and the FDAs implementing regulations. An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following:



completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDAs good laboratory practice, or GLP,
regulations;



submission to the FDA of an investigational new drug, or IND, application which must take effect before human clinical trials may begin;



approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated;



performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, regulations to establish the
safety and efficacy of the proposed drug product for each indication;



preparation and submission to the FDA of an NDA;



review of the product by an FDA advisory committee, where appropriate or if applicable;



satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product or its components are produced
to assess compliance with current good manufacturing practices, or GMP, regulations and to assure that the facilities, methods and controls are adequate to preserve the products identity, strength, quality and purity;



payment of user fees and securing FDA approval of the NDA; and



compliance with any post-approval requirements, including potential requirements for a risk evaluation and mitigation strategies, or REMS, and
post-approval outcomes studies required by the FDA.

Once a pharmaceutical candidate is identified for development, it enters the preclinical or nonclinical testing stage. Nonclinical tests include laboratory evaluations of product chemistry, toxicity and
formulation, as well as animal studies. An IND application sponsor must submit the results of the nonclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND. Some nonclinical testing may continue
even after the IND is submitted. In addition to including the results of the nonclinical studies, the IND will also include a protocol detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring
safety and the effectiveness criteria to be evaluated if the first phase lends itself to an efficacy determination. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the
IND on clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin. A clinical hold may occur at any time during the life of an IND, and may affect one or more specific studies or
all studies conducted under the IND.

All clinical
trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. They must be conducted under protocols detailing the objectives of the trial, dosing procedures, research subject selection and
exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and progress reports detailing the status of the clinical trials must be submitted to the FDA annually.
Sponsors also must timely report to FDA serious and unexpected adverse reactions, any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigation brochure, or any findings from
other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug. An IRB at each institution participating in the clinical trial must review and approve the protocol before a clinical trial commences at that
institution and must also approve the information regarding the trial and the consent form that must be provided

to each research subject or the subjects legal representative, monitor the study until completed and otherwise comply with IRB regulations.

Human clinical trials are typically conducted in three
sequential phases that may overlap or be combined:



Phase 1. The drug is initially introduced into healthy human subjects and tested for safety, dosage tolerance,
absorption, metabolism, distribution and elimination. In the case of some products for severe or life-threatening diseases, such as cancer, and especially when the product may be inherently too toxic to ethically administer to healthy volunteers,
the initial human testing is often conducted in patients who already have the condition.



Phase 2. Clinical trials are performed on a limited patient population intended to identify possible adverse
effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.



Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded
patient population at geographically dispersed clinical study sites. These studies are intended to establish the overall risk-benefit ratio of the product and provide an adequate basis for product approval and labeling claims. The FDA generally
requires two adequate and well controlled Phase 3 clinical trials, but in some cases may accept a single large trial with confirmatory evidence.

Human clinical trials are inherently uncertain and Phase 1,
Phase 2 and Phase 3 testing may not be successfully completed. The FDA or the sponsor may suspend a clinical trial at any time for a variety of reasons, including a finding that the research subjects or patients are being exposed to an unacceptable
health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRBs requirements or if the drug has been associated with unexpected
serious harm to patients. In some cases, clinical trials are overseen by an independent group of qualified experts organized by the trial sponsor, which is called the clinical monitoring board or data safety monitoring board. This group provides
authorization for whether or not a trial may move forward at designated check points. These decisions are based on the limited access to data from the ongoing trial.

During the development of a new drug, sponsors are given
opportunities to meet with the FDA at certain points. These points may be prior to the submission of an IND, at the end of Phase 2 and before an NDA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity
for the sponsor to share information about the data gathered to date and for the FDA to provide advice on the next phase of development.

Concurrent with clinical trials, sponsors usually complete additional animal safety studies and also develop additional information about
the chemistry and physical characteristics of the drug and finalize a process for manufacturing commercial quantities of the product in accordance with GMP requirements. The manufacturing process must be capable of consistently producing quality
batches of the drug and the manufacturer must develop methods for testing the quality, purity and potency of the drug. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the
drug candidate does not undergo unacceptable deterioration over its proposed shelf-life.

The results of product development, nonclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests and other control mechanisms, proposed labeling and
other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product. The submission of an NDA is subject to the payment of user fees, but a waiver of such fees may be obtained under specified limited
circumstances. The FDA reviews all NDAs submitted to ensure that they are sufficiently complete for substantive review before it accepts them for filing. It may request additional information rather than accept an NDA for filing. In this event, the
NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing.

Once the submission is accepted for filing, the FDA begins an in-depth review. NDAs receive
either standard or priority review. A drug representing a significant improvement in treatment, prevention or diagnosis of disease may receive priority review. The FDA may refuse to approve an NDA if the applicable regulatory criteria are not
satisfied or may require additional clinical or other data. Even if such data are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. The FDA reviews an NDA to determine, among other things, whether a
product is safe and effective for its intended use and whether its manufacturing is GMP-compliant. The FDA may refer the NDA to an advisory committee for review and recommendation as to whether the application should be approved and under what
conditions. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations. Before approving an NDA, the FDA will inspect the facility or facilities where the product is manufactured and tested.
After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the submission and may require substantial
additional testing or information in order for the FDA to reconsider its application. If, or when, those deficiencies have been addressed to the FDAs satisfaction, in a resubmission of the NDA, the FDA will issue an approval letter.

The FDA is
authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs are fast track designation, breakthrough
therapy designation and priority review designation.

Specifically, the FDA may designate a product for fast track review if it is intended, whether alone or in combination with one or more other drugs, for the treatment of a serious or life-threatening
disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. For fast track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a
fast track products NDA before the application is complete.

A product may also be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and
preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process; providing timely advice to the product sponsor regarding development and approval; involving
more senior staff in the review process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an efficient manner.

The FDA may also designate an NDA for priority review if it is for a drug that treats a serious condition and,
if approved, would provide a significant improvement in safety or effectiveness. The FDA determines, on a case-by-case basis, whether the proposed drug represents a significant improvement when compared with other available therapies. A priority
designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDAs goal for taking action on the NDA from 12 months to eight months.

Finally, the FDA may grant accelerated approval to a drug for
a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the drug has an effect on a surrogate endpoint that is reasonably likely to predict clinical
benefit. The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is
reasonably likely to predict an effect on IMM or another clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. Drugs granted accelerated approval must meet
the same statutory standards for safety and effectiveness as those granted traditional approval. Accelerated approval is generally contingent on a sponsors agreement to conduct additional post-approval studies to verify and describe the
drugs clinical benefit.

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation
by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. Once an approval is granted,
the FDA may withdraw the approval if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product may result in restrictions on the
product or even complete withdrawal of the product from the market. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further FDA
review and approval. In addition, the FDA may require testing and surveillance programs to monitor the effect of approved products that have been commercialized, and the FDA has the power to prevent or limit further marketing of a product based on
the results of these post-marketing programs.

Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their
establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and some state agencies for compliance with GMP regulations and other laws. Changes to the manufacturing process are strictly
regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from GMP requirements and impose reporting and documentation requirements upon the sponsor and any
third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain GMP compliance.

Failure to comply with the applicable U.S. requirements at
any time during the product development process or approval process, or after approval, may subject us to administrative or judicial sanctions, any of which could have a material adverse effect on us. These sanctions could include:



warning or untitled letters;



refusal to approve pending applications;



withdrawal of an approval;



imposition of a clinical hold;



product seizures;



total or partial suspension of production or distribution; or



injunctions, fines, disgorgement, or civil or criminal penalties.

The FDA strictly regulates the marketing, labeling, advertising and promotion of drug products that are placed
on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and
a company that is found to have improperly promoted off-label uses may be subject to significant liability.

From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions
governing the approval, manufacturing and marketing of products regulated by the FDA. In addition, FDA regulations and guidance are often issued revised or reinterpreted by the agency. It is impossible to predict whether legislative changes will be
enacted, or whether FDA regulations, guidance or interpretations will be issued or changed or what the impact of such changes, if any, may be.

Regulation Outside of the United States

In addition to regulations in the United States, we will be subject to regulations of other countries governing clinical trials and
commercial sales and distribution of our products. Whether or not we obtain FDA approval for

a product, we must obtain approval by the comparable regulatory authorities of countries outside of the United States before we can commence clinical trials in such countries and approval of the
regulators of such countries or economic areas, such as the European Union, before we may market products in those countries or areas. The approval process and requirements governing the conduct of clinical trials, product licensing, pricing and
reimbursement vary greatly from place to place, and the time may be longer or shorter than that required for FDA approval.

Under EU regulatory systems, a company may submit an MAA either under a centralized or decentralized procedure. The centralized procedure,
which is compulsory for medicines produced by biotechnology or those medicines intended to treat AIDS, cancer, neurodegenerative disorders or diabetes and optional for those medicines which are highly innovative, provides for the grant of a single
marketing authorization that is valid for all EU member states. The decentralized procedure provides for mutual recognition of national approval decisions. Under this procedure, the holder of a national marketing authorization may submit an
application to the remaining member states. Within 90 days of receiving the applications and assessments report, each member state must decide whether to recognize approval. If a member state does not recognize the marketing authorization, the
disputed points are eventually referred to the European Commission, whose decision is binding on all member states.

Other Healthcare Laws

Although we currently do not have any products on the market, if our drug candidates are approved and we begin commercialization, we may be subject to additional healthcare regulation and enforcement by
the federal government and by authorities in the states and foreign jurisdictions in which we conduct our business. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, privacy and security, price
reporting and physician sunshine laws and regulations.

The federal Anti-Kickback Statute makes it illegal for any person, including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully solicit, receive, offer, or pay
any remuneration that is intended to induce the referral of business, including the purchase, order, or prescription of a particular drug, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. Violations of
this law are punishable by up to five years in prison, and can also result in criminal fines, administrative civil money penalties and exclusion from participation in federal healthcare programs. In addition, many states have adopted laws similar to
the Anti-Kickback Statute. Some of these state prohibitions apply to the referral of patients for healthcare services reimbursed by any insurer, not just federal healthcare programs such as Medicare and Medicaid. Due to the breadth of these federal
and state anti-kickback laws, the absence of guidance in the form of regulations or court decisions, and the potential for additional legal or regulatory change in this area, it is possible that our future sales and marketing practices and/or our
future relationships with physicians might be challenged under these laws, which could harm us.

Another significant statute that may apply to us in the future is the federal False Claims Act. The federal False Claims Act prohibits anyone from knowingly presenting, or causing to be presented, for
payment to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services.
Manufacturers can be held liable under these laws if they are deemed to cause the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a
product off-label. In addition, our future activities relating to the reporting of wholesaler or estimated retail prices for our products, the reporting of prices used to calculate Medicaid rebate information and other information affecting federal,
state and third-party reimbursement for our products, and the sale and marketing of our products, are subject to scrutiny under this law. Penalties for False Claims Act violations include three times the actual damages sustained by the government,
plus mandatory civil penalties of between $5,500 and $11,000 for each separate false claim, the potential for exclusion from participation in federal healthcare programs, and, although the federal False Claims Act is a civil statute, False Claims
Act violations may also implicate various federal criminal statutes. If the government were to allege that we were, or convict us

of, violating these false claims laws, we could be subject to a substantial fine and may suffer a decline in our stock price. In addition, private individuals have the ability to bring actions
under the federal False Claims Act, and certain states have enacted laws modeled after the federal False Claims Act.

Because we intend to commercialize products that could be reimbursed under a federal healthcare program and other governmental healthcare
programs, we will have to develop a comprehensive compliance program that establishes internal controls to facilitate adherence to the rules and program requirements to which we will or may become subject. Although compliance programs can mitigate
the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be
subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and imprisonment, any of
which could adversely affect our ability to operate our business and our financial results.

More generally, The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, is expected to have a significant
impact on the healthcare industry. The Affordable Care Act is expected to expand coverage for the uninsured while at the same time containing overall healthcare costs. With regard to pharmaceutical products, among other things, the Affordable Care
Act expanded and increased industry rebates for drugs covered under Medicaid programs and made changes to the coverage requirements under the Medicare prescription drug benefit. We cannot predict the impact of the Affordable Care Act on
pharmaceutical companies, as many of the reforms require the promulgation of detailed regulations implementing the statutory provisions, some of which has not yet occurred. In the coming years, additional legislative and regulatory changes could be
made to governmental health programs that could significantly impact pharmaceutical companies and the success of our product candidates.

Coverage and Reimbursement

Sales of our products will depend, in part, on the extent to which the costs of our products will be covered by third-party payors, such
as government health programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly challenging the prices charged for medical products and services. Additionally, the containment of healthcare costs
has become a priority of federal and state governments and the prices of drugs have been a focus in this effort. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment
programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with
existing controls and measures, could limit our net revenue and results. If these third-party payors do not consider our products to be cost-effective compared to other therapies, they may not cover our products after approved as a benefit under
their plans or, if they do, the level of payment may not be sufficient to allow us to sell our products on a profitable basis. Decreases in third-party reimbursement for our products once approved or a decision by a third-party payor to not cover
our products could reduce or eliminate utilization of our products and have a material adverse effect on our sales, results of operations and financial condition. In addition, state and federal healthcare reform measures have been and will be
adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products once approved or additional pricing pressures.

In addition, in some non-U.S. jurisdictions, the
proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country. For example, the European Union provides options for its member states to restrict the
range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. A member state may approve a specific price for the medicinal product or it may
instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement limitations for

pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, reimbursement and pricing for products launched in the European Union do
not follow those of the United States and generally tend to be significantly lower.

Employees

As of September 30, 2014, we employed 13 employees, all of whom are full-time and engaged in research and development activities, operations, finance, business development and administration. Four of
our employees hold doctorate degrees (Ph.D., M.D. or PharmD.).

Property and facilities

We lease approximately 7,400 square feet of space for our current headquarters in South San Francisco, California under an agreement
that expires in August 2019. We believe that our existing facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms.

Our current executive officers, directors and key
employees, and their ages and positions as of September 30, 2014, are as set forth below:

Name

Age

Position

Executive Officers

Laurent Fischer, M.D.

50

Chairman of the Board and Chief Executive Officer

Éric Lefebvre, M.D.

50

Chief Medical Officer

Christopher Peetz

36

Chief Financial Officer

Helen Jenkins

51

Chief Operating Officer

Directors

Carol L. Brosgart, M.D.

63

Director

Jeffrey H. Cooper

58

Director

Craig S. Gibbs

52

Director

Patrick Heron

44

Director

Gwen A. Melincoff

62

Director

Graeme J. Moyle, M.D.

51

Director

Eckard Weber, M.D.

64

Director

Laurent Fischer, M.D.
has served as a member of our board of directors since April 2009 and as Chief Executive Officer since March 2014. Prior to joining Tobira full time he was Chairman and Chief Executive Officer of Jennerex, Inc. (now part of SillaJen, Inc.), a
private, clinical-stage biotherapeutics company focused on oncolytic immunotherapy products for cancer, which he joined in 2012. Prior to Jennerex, Dr. Fischer was President and CEO of Ocera Therapeutics, Inc., a privately held, clinical-stage
biopharmaceutical company focused on the development and commercialization of therapeutics for gastrointestinal and liver diseases, since 2005. Prior to Ocera, Dr. Fischer was President and CEO of life sciences company Auxeris Therapeutics,
Inc. from 2003 to 2005 and President and COO of technology company RXCentric.com, Inc. (now part of Allscripts Healthcare Solutions, Inc.) from 1999 to 2000 and Chief Medical Officer and Vice President of Corporate Development of medication
management company MedVantx from 2001 to 2003. Dr. Fischer served as Senior Vice President of the Global Virology Franchise at Dupont Pharmaceuticals/Dupont-Merck from 1997 to 1999. From 1995 to 1997, Dr. Fischer served as Medical Director
for the Virology Group at healthcare company Hoffman-LaRoche, Ltd. Dr. Fischer received a Medical Degree from the University of Geneva and received a Doctorate in Medicine from the Geneva Medical School, Switzerland. Our board of directors
believes that Dr. Fischers position as our Chief Executive Officer, his extensive experience in general management and his experience in the biopharmaceutical industry qualify him to serve as a member of our board of directors.

Éric Lefebvre, M.D. has served
as our Chief Medical Officer since January 2012. Prior to joining Tobira, Dr. Lefebvre served as the Global Medical Affairs Leader from 2007 to 2011 and Global Clinical Research and Development Leader, Virology (HIV and HCV) from 2003 to 2007
at Janssen Pharmaceuticals (formerly Tibotec Pharmaceuticals, Ltd), a Johnson & Johnson Services, Inc. company. From 2001 until 2003, Dr. Lefebvre served as Medical Affairs Director, HIV, HSV and Vaccines at GlaxoSmithKline, Inc.
Canada. Dr. Lefebvres career in the industry was preceded by 15 years of providing primary care and conducting clinical research in HIV and hepatitis at Clinique Médicale LActuel in Montréal, Canada.
Dr. Lefebvre received an M.D. from the University of Montréal and received his undergraduate degree Health Sciences from Édouard-Montpetit College.

Christopher Peetz has served as our Chief Financial
Officer and head of corporate development since March 2014. Prior to joining Tobira, Mr. Peetz was Vice President, Finance & Corporate Development at Jennerex, Inc. (now part of SillaJen, Inc.), which he joined in 2012. Prior to
Jennerex, Mr. Peetz served in a variety of roles at biopharmaceutical company Onyx Pharmaceuticals, Inc. (now part of Amgen USA Inc.), most recently as Senior Director, Marketing from 2011 to 2012, as Senior Director, Corporate
Development & Strategy from 2010 to

2011,as Director, Strategic Planning from 2008 to 2010 and as Director, Finance from 2007 to 2008. Prior toOnyx Pharmaceuticals, Inc., Mr. Peetz provided merger andacquisition advisory services at LaSalle Corporate Finance, a part of ABN AMRO Bank N.V., and held positions at biopharmaceutical company Abgenix, Inc. (now part of Amgen USA Inc.) and biotechnology company Solazyme, Inc. Mr. Peetz received
a B.S.B.A. from Washington University in St. Louis and received an M.B.A. from Stanford Graduate School of Business.

Helen Jenkins has served as our Chief Operating Officer since March 2014 and previously as our Senior Vice President, Development
Operations, since August 2011. Prior to joining Tobira, Ms. Jenkins served from 2007 until 2011 as Executive Vice President, Chief Operating Officer and Chief Financial Officer at biopharmaceutical company Nuon Therapeutics, Inc. From 2000
until 2007 Ms. Jenkins served as Senior Vice President, Development Operations at biopharmaceutical company Saegis Pharmaceuticals, Inc. Previously, Ms. Jenkins held a variety of roles at biotechnology companies Genentech, Inc., Valentis,
Inc. and Glycomed Incorporated. Ms. Jenkins received a B.S. in Biochemistry from California Polytechnic State University, San Luis Obispo and an M.A. in Cellular and Molecular Biology from San Francisco State University.

Carol L. Brosgart, M.D. has served as a member of our
board of directors since September 2009. Dr. Brosgart served as Senior Advisor on Science and Policy to the Division of Viral Hepatitis at the CDC and to the Viral Hepatitis Action Coalition at the CDC Foundation from 2011 to 2013. Dr. Brosgart
has also served as a member on the faculty of the School of Medicine at the University of California, San Francisco for the past three decades, where she is a Clinical Professor in the Division of Global Health and in Biostatistics and Epidemiology.
From March 2011 until August 2011, Dr. Brosgart served as Chief Medical Officer at biotechnology company Alios BioPharma, Inc. Prior to Alios, Dr. Brosgart served as Senior Vice President and Chief Medical Officer of Childrens Hospital &
Research Center in Oakland, California from 2009 until February 2011. Previously, she served for eleven years, from 1998 until 2009, at biopharmaceutical company Gilead Sciences, Inc., where she held a number of senior management roles, most
recently as Vice President, Public Health and Policy and earlier as Vice President, Clinical Research and Vice President, Medical Affairs and Global Medical Director, Hepatitis. Prior to Gilead, Dr. Brosgart worked for more than 20 years in clinical
care, research and teaching at several Bay Area medical centers. She was the founder and Medical Director of the East Bay AIDS Center at Alta Bates Medical Center in Berkeley, California from 1987 until 1998 and served as the Medical Director of
Central Health Center, Oakland, California, of the Alameda County Health Care Services Agency. Dr. Brosgart has also served on the boards of privately held companies and public, not-for-profit organizations. Dr. Brosgart received a B.S. in Community
Medicine from the University of California, Berkeley and received an M.D. from the University of California, San Francisco. Her residency training was in pediatrics, public health and preventive medicine at UCSF and UC Berkeley. Our board of
directors believes that Dr. Brosgarts extensive experience in general management and her experience in the biopharmaceutical industry qualify her to serve as a member of our board of directors.

Jeffrey H. Cooper has served as a member of our board
of directors since June 2014. Mr. Cooper currently serves as an independent consultant. Prior to his role as an independent consultant, Mr. Cooper served from November 2013 until December 2013 as a senior advisor and from July 2012 until October
2013 as Chief Financial Officer of biotechnology company KaloBios Pharmaceuticals, Inc. Prior to joining KaloBios, Mr. Cooper served from 2003 to May 2012 in positions of increasing responsibility at BioMarin Pharmaceutical, Inc., a publicly
traded pharmaceutical company beginning as Vice President, Controller, to his most recent position as Senior Vice President and Chief Financial Officer from 2007 to May 2012. Prior to BioMarin, from 1995 to 1997 and 1998 to 2002, he served as Vice
President of Finance at Matrix Pharmaceuticals where he was responsible for the financial management of the company. Earlier in his career, Mr. Cooper held numerous finance-related positions within the health care and pharmaceutical industries,
including Corporate Controller at Foundation Health Systems and Director of Business Analysis at Syntex Corporation, a company he worked for from 1983 to 1995. Mr. Cooper received a B.A. in Economics from the University of California, Los Angeles
and an M.B.A. from Santa Clara University. Our board of directors believes that Mr. Coopers extensive experience in general management, finance and in the biotechnology industry qualify him to serve as a member of our board of directors.

Craig S. Gibbs has served as a member of our board of directors since April 2014.
Dr. Gibbs has served as an independent consultant since May 2013. From 1992 until 2013, Dr. Gibbs served in various positions at Gilead Sciences, Inc., including most recently as Vice President of Commercial Strategy/Planning and Operations
from 2007 to 2013 and as Senior Director, Corporate Development from 2004 to 2007, Senior Director, Biology Research from 1998 to 2004 and in other research and development positions from 1992 to 1998. Prior to his time at Gilead, Dr. Gibbs
served from 1989 to 1992 as Visiting Post-doctoral Scientist at Genentech, Inc. Dr. Gibbs received a B.Sc. in Biochemistry from Massey University, a Ph.D. in Molecular Biology from the University of Glasgow and an M.B.A. from Golden Gate
University. Our board of directors believes that Dr. Gibbs extensive experience in general management and in the biotechnology industry qualify him to serve as a member of our board of directors.

Patrick Heron has served as a member of our board of
directors since March 2007. Mr. Heron is a General Partner with Frazier Healthcare Ventures, a venture capital firm focusing on the healthcare industry, which he joined in 1999. Prior to joining Frazier Healthcare Ventures, Mr. Heron
worked at the management consulting firm McKinsey & Company. Before McKinsey, Mr. Heron held positions with Massachusetts General Hospital and biotechnology firm Cetus Corporation. Mr. Heron currently serves on the boards of a
number of privately held companies. Mr. Heron received a B.A. in Political Science from the University of North Carolina at Chapel Hill and received an M.B.A. from Harvard Business School. Our board of directors believes that
Mr. Herons extensive business experience, his experience in venture capital, his experience in the life sciences sector and his service as a director of various private companies qualify him to serve as a member of our board of directors.

Gwen A. Melincoff has served as a
member of our board of directors since June 2014. Since August 2014, Ms. Melincoff has served as Vice President, Business Development BTG International Inc., a healthcare company. From September 2004 to December 2013, Ms. Melincoff was Senior
Vice President of Business Development at pharmaceutical company Shire Plc. Prior to joining Shire, Ms. Melincoff was Vice President of Business Development at Adolor Corporation (now part of Cubist Pharmaceuticals, Inc.), a biopharmaceutical
company focused on the development of pain management products. Earlier in her career, Ms. Melincoff worked for Eastman Kodak Company for over ten years in a number of their health care companies. Ms. Melincoff received a B.S. in Biology from The
George Washington University and an M.S. in Management and Health Care Administration from Pennsylvania State University. Our board of directors believes that Ms. Melincoffs extensive experience in management and the pharmaceutical
industry qualify her to serve as a member of our board of directors.

Graeme J. Moyle, M.D. has served as a member of our board of directors since June 2014. Dr. Moyle is Director of HIV Research Strategy and Associate Specialist in HIV/GU Medicine at the
Chelsea and Westminster Hospital, London, where he has served since 1994. Prior to his time at Chelsea and Westminster Hospital, Dr. Moyle served as Medical Director, HIV at pharmaceutical company F. Hoffmann-La Roche Ltd. Dr. Moyle received an
M.B.B.S. in Medicine and an M.D., both from the University of Adelaide. Our board of directors believes that Dr. Moyles extensive experience in medicine and management qualify him to serve as a member of our board of directors.

Eckard Weber, M.D. is a founder of Tobira and has
served has served as a member of our board of directors since our inception in 2007. Dr. Weber has served as a partner with Domain Associates, LLC, a private venture capital management firm focused on life sciences, since 2001. Dr. Weber
has over 20 years of drug discovery and development experience. Dr. Weber also served as interim Chief Executive Officer and Chairman of the Board of Sonexa Therapeutics, a seed-stage biopharmaceutical company from 2007 until June 2014.
Dr. Weber also serves as chairman of the board at Ocera Therapeutics, Orexigen Therapeutics and Tragara Pharmaceuticals, and is a member of the board of directors of Adynxx, Domain Elite Holdings and Tobira Therapeutics. Dr. Weber has been
the founding Chief Executive Officer of multiple Domain Associates portfolio companies including Acea Pharmaceuticals, Ascenta Therapeutics, Calixa Therapeutics, Cytovia and Novacardia. Dr. Weber also served as chairman or member of the board
of directors of a number of companies until their sale including Peninsula Pharmaceuticals (sold to Johnson & Johnson in 2005), Cerexa (sold to Forest Laboratories in 2007) and Calixa Therapeutics (sold to Cubist Therapeutics, Inc. in
2009). Dr. Weber also served as a member of the board of

directors of Conforma Therapeutics (sold to Biogen-IDEC in 2006) and Cabrellis Pharmaceuticals (sold to Pharmion in 2006). Until 1995, Dr. Weber was a tenured Professor of Pharmacology at
the University of California, Irvine. Dr. Weber is the inventor or co-inventor of numerous patents and patent applications and has published more than 130 papers in scientific periodicals. Dr. Weber received his German undergraduate degree
from Kolping Kolleg in Germany and an M.D. from the University of Ulm Medical School in Germany. Dr. Weber received his postdoctoral training in neuroscience at Stanford University Medical School. Our board of directors believes that
Dr. Webers extensive experience in the life sciences industry as an entrepreneur, chief executive officer and venture capitalist, as well as his training as a physician, provide him with the qualifications and skills to serve as a
director of our company.

Board Composition

Upon the completion of this offering, our board of directors
will be divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third
annual meeting following election. Our directors will be divided among the three classes as follows:



the Class I directors will be Dr. Brosgart, Mr. Gibbs and Dr. Moyle, and their terms will expire at the annual meeting of stockholders
to be held in 2015;



the Class II directors will be Ms. Melincoff and Messrs. Cooper and Heron, and their terms will expire at the annual meeting of stockholders
to be held in 2016; and



the Class III directors will be Messrs. Fischer and Weber, and their terms will expire at the annual meeting of stockholders to be held in 2017.

Directors in a particular class
will be elected for three-year terms at the annual meeting of stockholders in the year in which their terms expire. As a result, only one class of directors will be elected at each annual meeting of our stockholders, with the other classes
continuing for the remainder of their respective three-year terms. Each directors term continues until the election and qualification of his or her successor, or the earlier of his or her death, resignation or removal.

Our restated certificate of incorporation and amended and
restated bylaws that will be in effect upon the completion of this offering authorize only our board of directors to fill vacancies on our board of directors until the next annual meeting of stockholders. Any additional directorships resulting from
an increase in the authorized number of directors would be distributed among the three classes so that, as nearly as possible, each class would consist of one-third of the authorized number of directors.

The classification of our board of directors may have the
effect of delaying or preventing changes in our control or management. See Description of Capital StockAnti-Takeover ProvisionsAnti-takeover Effects of Delaware Law and Our Restated Certificate of Incorporation and Bylaws.

Code of Business Conduct and Ethics

Our board of directors intends to adopt a code of ethics and
business conduct to be effective upon the completion of this offering. The code of ethics and business conduct will apply to all of our employees, officers and directors. Upon the completion of this offering, the full text of our code of ethics and
business conduct will be posted on our website. We intend to disclose, to the extent required by applicable rules and regulations, future amendments to, or waiver of, our code of ethics and business conduct, at the same location on our website
identified above and also in public filings we will make with the Securities and Exchange Commission. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on
our website to be part of this prospectus or in deciding whether to purchase shares of our common stock.

Our board of directors determined that all of our directors,
other than Dr. Fischer, are independent directors as defined under the rules of The NASDAQ Stock Market. In making this determination, our board of directors reviewed and discussed information provided by the directors and us with regard
to each directors business and personal activities and relationships as they may relate to us and our management, including our consulting agreement with Dr. Brosgart.

Role of the Board in Risk Oversight

One of the key functions of our board of directors is
informed oversight of our risk management process. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure. Our executive officers are responsible for the day-to-day management of the material risks
we face. Our board of directors administers its oversight function directly as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective areas of oversight. For example, our
audit committee is responsible for overseeing the management of risks associated with our financial reporting, accounting and auditing matters; our compensation committee oversees major risks associated with our compensation policies and programs;
and our nominating and governance committee oversees the management of risks associated with director independence, conflicts of interest, composition and organization of our board of directors and director succession planning.

Board Committees

Our board of directors has established an audit committee, a
compensation committee and a nominating and governance committee. Our board of directors and its committees set schedules for meeting throughout the year and can also hold special meetings and act by written consent from time to time, as
appropriate. Our board of directors has delegated various responsibilities and authority to its committees as generally described below. The committees will regularly report on their activities and actions to the full board of directors. Each member
of each committee of our board of directors qualifies as an independent director in accordance with NASDAQ listing standards. Each committee of our board of directors has a written charter approved by our board of directors. Upon the completion of
this offering, copies of each charter will be posted on our website. The inclusion of our website address in this prospectus does not include or incorporate by reference the information on our website into this prospectus.

Audit Committee

Effective as of the completion of this offering, the members
of our audit committee will be Messrs. Cooper and Gibbs and Dr. Moyle, each of whom can read and understand fundamental financial statements. Messrs. Cooper and Gibbs and Dr. Moyle are each independent under the rules and
regulations of the Securities and Exchange Commission, or SEC, and the listing standards of The NASDAQ Global Market applicable to audit committee members. Mr. Cooper will chair the audit committee. Mr. Cooper qualifies as an audit committee
financial expert within the meaning of SEC regulations and meets the financial sophistication requirements of The NASDAQ Stock Market.

The audit committee of our board of directors oversees our accounting practices, system of internal controls, audit processes and
financial reporting processes. Among other things, our audit committee is responsible for reviewing our disclosure controls and processes and the adequacy and effectiveness of our internal controls. It also discusses the scope and results of the
audit with our independent registered public accounting firm, reviews with our management and our independent registered public accounting firm our interim and year-end operating results and, as appropriate, initiates inquiries into aspects of our
financial affairs. Our audit committee is responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous
submission by our employees of concerns regarding questionable accounting or auditing matters. In addition, our audit committee has sole and direct responsibility for the appointment, retention, compensation and oversight of the

work of our independent registered public accounting firm, including approving services and fee arrangements. Significant related party transactions will be approved by our audit committee before
we enter into them, as required by applicable rules and listing standards.

Compensation Committee

Effective as of the completion of this offering, the members of our compensation committee will be Ms. Melincoff and Messrs. Cooper and Heron. Mr. Heron will chair the compensation committee.
Our board of directors has determined that each of Ms. Melincoff and Messrs. Cooper and Heron is independent under the applicable rules and regulations of The NASDAQ Stock Market, is a non-employee director as defined in
Rule 16b-3 promulgated under the Exchange Act and is an outside director as that term is defined in Section 162(m) of the United States Internal Revenue Code of 1986, as amended, or Section 162(m). The purpose of our
compensation committee is to discharge the responsibilities of our board of directors relating to executive compensation policies and programs. Among other things, specific responsibilities of our compensation committee include evaluating the
performance of our chief executive officer and determining our chief executive officers compensation. The compensation committee also determines the compensation of our other executive officers in consultation with our chief executive officer.
In addition, our compensation committee administers our stock-based compensation plans, including granting equity awards and approving modifications of such awards. Our compensation committee also reviews and approves various other compensation
policies and matters.

Nominating and
Governance Committee

Effective as of the
completion of this offering, the members of our nominating and governance committee will be Dr. Brosgart and Messrs. Moyle and Weber. Mr. Weber will chair the nominating and governance committee. The nominating and governance committee
oversees the nomination of directors, including, among other things, identifying, evaluating and making recommendations of nominees to our board of directors and evaluates the performance of our board of directors and individual directors. Our
nominating and governance committee is also responsible for reviewing developments in corporate governance practices, evaluating the adequacy of our governance practices and making recommendations to our board of directors concerning corporate
governance matters.

Compensation Committee Interlocks and
Insider Participation

In the past three
years, none of the members of our compensation committee is or has in the past served as an officer or employee of our company. None of our executive officers currently serves, or in the past year has served, as a member of a board of directors or
compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee.

The following table sets forth information about the
compensation of the non-employee members of our board of directors who served as a director during our fiscal year ended December 31, 2013. Other than as set forth in the table and described more fully below, during our fiscal year ended
December 31, 2013, we did not pay any fees to, make any equity awards or non-equity awards to or pay any other compensation to the non-employee members of our board of directors. Andrew Hindman, our former chief executive officer, received
no compensation for his service as a director, and is not included in the table below.

Name

Fees Earned orPaid in Cash($)

Option
Awards($)(1)(2)(3)

All OtherCompensation ($)

Total ($)

Carol L. Brosgart, M.D.

$

10,000

5,600

102,500

(4)

118,100

Laurent Fischer, M.D.(5)

8,000

8,750



16,750

Patrick Heron









Michael J. Kamdar(6)

6,000

5,600



11,600

Jack Nielsen(7)









Daniel K. Turner III(6)









Eckard Weber, M.D.









(1)

Represents the aggregate grant date fair value of option awards granted during the year ended December 31, 2013. See Note 9 to Notes to Financial Statements
included elsewhere in this prospectus for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards.

(2)

Represents options granted in February 2013 that vest and become exercisable in full immediately prior to the consummation of a strategic transaction prior to December
31, 2013, provided that the optionee remains in continuous service to us through such date.

(3)

As of December 31, 2013, Dr. Fischer held outstanding options to purchase 55,024 shares of our common stock, Dr. Brosgart held outstanding options to
purchase 6,058 shares of our common stock, Mr. Kamdar held outstanding options to purchase 3,407 shares of our common stock and Messrs. Heron and Turner and Dr. Weber each held outstanding options to purchase 3,029 shares of our common
stock.

(4)

Represents the aggregate consulting fees earned by Dr. Brosgart during the fiscal year ended December 31, 2013 related to services under her consulting agreement.

(5)

Dr. Fischer, our current Chief Executive Officer, is included in the table above since he was a non-employee director during the year ended December 31, 2013.

(6)

Messrs. Kamdar and Turner resigned as directors in April 2014.

(7)

Mr. Nielsen resigned as a director in May 2014.

We have entered into a consulting agreement with Dr. Brosgart pursuant to which she has agreed to provide us with certain advisory and
consulting services. In consideration for such services, we agreed to pay Dr. Brosgart $9,165 per month for consulting services, as well as pay or reimburse her for all reasonable out-of-pocket expenses directly related to the performance of
her duties and responsibilities to us under the agreement. Dr. Brosgart was paid $0, $0 and $102,500 under the consulting agreement in 2011, 2012 and 2013, respectively.

Non-Employee Director Compensation

Although we granted an option to our non-employee
directors who were not affiliated with certain of our investors in February 2013, as reflected in the table above, prior to this offering we have not had any established policy with regard to compensation payable to non-employee members of our board
of directors. In April 2014, we granted Dr. Brosgart an option to purchase 13,254 shares of our common stock and Michael Kamdar an option to purchase 757 shares of our common stock. In connection with Mr. Gibbss appointment to the
Board in April 2014, we granted him an option to purchase 15,147 shares of our common stock. Jeffrey H. Cooper and Graeme J. Moyle were appointed to our board of directors in June 2014 and in connection with their appointments, we granted each
of them an option to purchase 9,467 shares of our common stock.

Following the effectiveness of this offering, each of our non-employee directors will
receive the following cash compensation for board services, as applicable:



$35,000 per year for service as a board of directors member;



$15,000 per year for service as chairman of the Audit Committee;



$10,000 per year for service as chairman of the Compensation Committee;



$7,500 per year for service as chairman of the Nominating and Corporate Governance Committee;



$7,500 per year for service as non-chairman member of the Audit Committee;



$5,000 per year for service as non-chairman member of the Compensation Committee; and



$3,750 per year for service as non-chairman member of the Nominating and Corporate Governance Committee.

Non-employee members of our board of directors will also
receive automatic grants of non-statutory stock options under our 2014 Equity Incentive Plan (our 2014 Plan). For purposes of our automatic director grant program, a non-employee director is a director who is not employed by us and who does not
receive compensation from us or have a business relationship with us that would require disclosure under certain SEC rules. Each non-employee director joining our board of directors will automatically be granted a non-statutory stock option to
purchase 5,301 shares of common stock with an exercise price equal to the fair market value of our common stock on the grant date. This initial option will vest ratably in annual installments over three years of service following the date of grant.

In addition, on the date of each annual
meeting of our stockholders, each non-employee director will automatically be granted a non-statutory stock option to purchase 3,029 shares of our common stock on that date with an exercise price equal to the fair market value of our common stock on
the grant date. A non-employee director who receives an initial award will not receive the additional annual award in the same calendar year. Automatic annual grants vest in full on the one-year anniversary of the grant date.

If we are subject to a change in control, then all of the
directors automatic grants will become fully vested. All automatic director options have a maximum term of ten years.

We will also reimburse our non-employee directors for their reasonable out-of-pocket expenses incurred in attending board of directors and
committee meetings.

The following table provides information concerning the
compensation paid to our former President and Chief Executive Officer and our other next two most highly compensated executive officers during the year ended December 31, 2013, which include our current Chief Medical Officer and our former
Chief Financial Officer. We refer to these individuals as our named executive officers.

Name and Principal Position

Year

Salary ($)

OptionAwards($)(1)

Non-EquityIncentive PlanCompensation ($)

All OtherCompensation ($)

Total ($)

Andrew Hindman

2013

360,000

109,119(3

)(6)





469,119

Former President and Chief

Executive Officer(2)

Éric Lefebvre, M.D.

2013

335,000

27,927(4

)(6)



2,645

365,572

Chief Medical Officer

Caroline Loewy

2013

300,000





2,707

302,707

Former Executive Vice

President and Chief Financial

Officer(5)

(1)

Represents the aggregate grant date fair value of option awards granted during the year ended December 31, 2013. See Note 9 to Notes to Financial Statements
included elsewhere in this prospectus for a discussion of the assumptions made by us in determining the grant date fair value of our equity awards. In accordance with SEC rules, the grant date fair value of an award subject to performance conditions
is based on the probable outcome of the conditions.

(2)

Mr. Hindmans employment with us terminated in January 2014.

(3)

Amount reflects the probable achievement of performance conditions applicable to shares subject to an option granted to Mr. Hindman. The maximum grant date fair
value of this award, assuming all of the performance conditions were to be achieved, was $109,119.

(4)

Amount reflects the probable achievement of performance conditions applicable to shares subject to an option granted to Dr. Lefebvre. The maximum grant date fair
value of this award, assuming all of the performance conditions were to be achieved, was $27,927.

(5)

Ms. Loewys employment with us terminated in February 2014. Following the termination of her employment, we engaged Ms. Loewy as a consultant for a
one-year term.

(6)

These options were to vest and become exercisable in full immediately prior to the achievement of a performance goal relating to potential strategic transactions prior
to December 31, 2013, provided that the optionee had provided continuous service to us through the date of the consummation of such strategic transactions.

Narrative Explanation of Certain Aspects of the Summary Compensation Table

The compensation paid to our named executive
officers consists of the following principle components:

In February 2013, the compensation committee of our board of directors approved an increase to the annual base
salaries of Andrew Hindman and Éric Lefebvre, M.D. retroactive to January 1, 2013. There were no adjustments to Caroline Loewys base salary of $300,000 during the year ended December 31, 2013. As such, the base salaries of our
named executive officers for 2013 compared to the year ended December 31, 2012 were as follows:

Name

2012 Base Salary ($)

2013 Base Salary ($)

Andrew Hindman

347,650

360,000

Éric Lefebvre, M.D.

325,000

335,000

Caroline Loewy

300,000

300,000

Performance-Based Cash
Bonuses

Pursuant to offer letters with
Andrew Hindman, Éric Lefebvre, M.D. and Caroline Loewy, each named executive officer was eligible to earn an annual incentive cash bonus based on objective or subjective criteria established by our board of directors or its compensation
committee equal to a specified percentage of his or her base salary (40% with respect to Mr. Hindman, 35% with respect to Dr. Lefebvre and 25% with respect to Ms. Loewy). None of our named executive officers was awarded an annual
incentive bonus for the year ended December 31, 2013.

In March 2014, our compensation committee approved the payment of a cash retention bonus to Dr. Lefebvre in the amount of $80,901 upon the consummation of this offering.

Stock Options

We offer stock options to our employees, including our named
executive officers, as the long-term incentive component of our compensation program. Our stock options allow our employees to purchase shares of our common stock at a price equal to the fair market value of our common stock on the date of grant as
determined by our board of directors or the compensation committee of our board of directors. Our stock options granted to newly hired employees generally vest as to 25% of the total number of option shares on the first anniversary of the award
and in equal monthly installments over the following 36 months.

On July 15, 2014, our board of directors approved that options to purchase 162,685 shares of common stock at an exercise price equal to the initial public offering price set forth on the cover of this
prospectus be granted coincident with the consummation of this offering, of which 94,158 will be awarded to executive officers.

On February 7, 2013, our board of directors granted options to purchase shares of our common stock to Andrew Hindman and Éric
Lefebvre, M.D. Caroline Loewy did not receive any equity grants during the year ended December 31, 2013. The option grants to Andrew Hindman and Éric Lefebvre, M.D. were intended to incentivize such officers to achieve our goal of
consummating a strategic transaction during 2013. Such options were granted under our 2010 Stock Plan (our 2010 Plan):

Name

Number of Shares UnderlyingOption Grants (#)(1)

Exercise Price ($)

Andrew Hindman

59,032

5.02

Éric Lefebvre, M.D.

15,108

5.02

(1)

These options were to vest and become exercisable in full immediately prior to the achievement of a performance goal relating to potential strategic transactions prior
to December 31, 2013 provided that the optionee had provided continuous service to us through the date of the consummation of such strategic transactions.